Arbitration Law Will be “Messy,” Bring Operational Concerns, Panelists Say
By Joey Berlin


The state’s new law allowing arbitration of payment disputes on certain out-of-network care carries concerns for physicians and uncertainty about what it will look like from an enforcement standpoint, a panel told attendees at the Texas Medical Association Winter Conference on Saturday morning. 

Last year’s Senate Bill 1264, which introduced independent dispute resolution on medical bills for certain care provided under state-regulated health plans, is now in effect. A panel at Saturday morning’s Dawn Duster session, moderated by TMA lobbyist Clayton Stewart, featured Austin oncologist Debra Patt, MD, chair of the TMA Council on Legislation; Brint Carlton, executive director of the Texas Medical Board (TMB); and health care attorney Kevin Wood. (TMA’s own summary of SB 1264 is available here.)

Dr. Patt said the concerns for physicians related to the new law fall into “two major buckets:” operational concerns and “natural consequences that we worry about with policy.” She noted some specialties – such as anesthesiologists, radiologists, and pathologists – will find themselves more affected by the new system than others.

“That’s actually a unique problem, because if you’re in a small practice and if this happens rarely, how do you operationally develop a mechanism in your revenue-cycle team to make sure that you can get appropriately remunerated for the services that you provide?” she said.

Among the “natural consequences,” Dr. Patt worries about effects SB 1264 will have on the way insurers do business. She foresaw that it may be “more attractive for some payers to be out of network, because they may say [ultimately], they’re paying less over time.” TMA will need to watch closely for those effects, she said.

“I think the radiologists, the pathologists, the anesthesiologists, need to look really closely at this,” she said. “Because if they’re out of network, more often than not, this is going to be a challenge for them to collect.”

In the early days of the law, physicians won’t be alone in feeling their way through its implications; TMB and the Texas Department of Insurance (TDI) also will be in new waters. Mr. Carlton, TMB’s executive director, said the board’s enforcement role will be focused not on the arbitration side of the law but on “whether or not a patient received a balance bill, a surprise bill, and if there was a waiver on file.”

For the state-regulated plans and care situations covered under SB 1264, balance billing is generally prohibited. But as noted in TMA’s summary, there’s an exception that requires a written disclosure be provided to patients. TDI has put forth an emergency rule on that exception scenario that’s now in effect, but the agency is simultaneously accepting comments on that emergency rule until Feb. 10.

Mr. Carlton said a TMB rule proposal related to SB 1264 will come after the TDI comment period is over, “perhaps June at the earliest.”

“Admittedly, it’s probably going to be kind of messy as this starts,” he said. “We’re not really sure how this is going to look either, when we start to get these complaints. I think there’s a lot of gray area in this of what is elective care, what is emergency care, does one flow into the next if something goes wrong.” 

Mr. Wood said physicians are facing a compressed time period with the arbitration process that can lead to arbitrators inappropriately weighting the benchmarks SB 1264 calls for to reach their decision on payment. He encouraged physicians to “take full advantage” of the opportunity to settle with the health plan before reaching arbitration.

The panel also addressed prior authorization and the headaches it continues to give physicians. Dr. Patt says prior auth has gotten more complicated and arduous in several ways, and her practice has had to triple its staffing in the last few years.

“When I started practicing in Austin 13 years ago, I could write for chemotherapy and start chemotherapy within a day or two,” she said. “Now I have to wait a business week prior to initiating chemotherapy, because my staff anticipates that that’s how long it will take, at least” to receive prior authorization, Dr. Patt said.

TMA is collecting physician’s “prior authorization nightmare” stories about their patients. Share yours on the TMA website.

Last Updated On

December 02, 2020

Originally Published On

January 31, 2020

Joey Berlin

Associate Editor

(512) 370-1393

Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

More stories by Joey Berlin