Sean Martin of Coppell underwent quadruple bypass surgery two years ago in a hospital in his insurer's network.

Sean Martin hopes to get mediation for a $6,300 bill from an anesthesiologist who wasn't in his insurance network.

But he received a $6,300 bill from the anesthesiologist who worked on him and who was not in the insurer's network. Martin and his wife, Traci, have struggled to pay the bill.

They are now among countless families waiting anxiously for an untangling of a new law that allows them to see a mediator for such unexpected hospital bills.

"There is, on its face, a potential role of a mediator," said Mike Amis, a trial lawyer and mediator with Dallas-based Burdin Mediations. "This is great – instead of guns and knives, let's go talk about it."

But the problem with the law is that Amis and other mediators, so far, are reluctant to participate.

These mediators are negotiators acting as a link between health providers and patients.

They're upset by the law's requirement to decide whether a physician or hospital is acting in "bad faith" during the mediation process.

The law is vague on what constitutes bad faith, mediators say.
It could be defined as anything from a hospital administrator not showing up at the mediation meeting or either party withholding information about the case.

What's more, physicians and hospitals can choose the mediator in a patient billing dispute.

So whistle-blowing to the Texas Medical Board, as the law requires, in effect could blacklist the mediator from future cases, said Karl Bayer, an Austin-based mediator and critic of the legislation.

"After the mediator does that once, who's going to ever hire that mediator again?" Bayer said.

Mediators now have an opportunity to make their case to the Texas Department of Insurance, which will set up regulations for the law.

The law was passed to combat a growing problem known as balance billing.

This occurs when a patient visits a hospital in the insurer's network and is treated by hospital-based physicians, such as anesthesiologists or radiologists, who are not in the network.
Without a prearranged contract, doctors in such situations can demand any price from the patient's insurer, but the insurer is under little obligation to pay.

In the end, the patient is stuck with the unpaid balance.

$1,000 threshold

Under this law, patients with medical debt exceeding $1,000 can elect to have a mediator decide what they owe, provided the medical service was conducted by a physician in a hospital covered under the patient's insurance.

State Rep. Kelly Hancock, R-North Richland Hills, wrote the bill that became law in June after he received complaints from constituents and learned of balance billing among state employees.

In 2007 and 2008, state employees were balance-billed for $383.8 million, Hancock said.

Hancock said he did not intend to put mediators in an awkward position. The law is an attempt to give patients some recourse against specialists, such as anesthesiologists and radiologists, Hancock said.

In many North Texas hospitals, a majority of the physician specialists are contract workers from a single company.

For example, Pinnacle Anesthesia in Dallas and Radiology Associates of Tarrant County are primary sources of anesthesiologists and radiologists for several hospitals in North Texas.

Hancock complains that without price competition for such services, those companies can command favorable contracts from hospitals and less-than-fair payments from patients.

Many of those patients have no clue that the radiologists or anesthesiologists are not in their insurer's network, Hancock said.

"I don't consider it free-market principles," Hancock said.

Providers respond

Both Pinnacle and Radiology Associates disagree with Hancock.

They say they participate in all major insurers' networks.

Lynn Elliott, chief executive of Radiology Associates, said more than 90 percent of the patients they serve are covered by Medicare, the government insurance for the disabled and elderly, and Medicare doesn't permit balance billing.

"In fact, our prices have gone down," Elliott said. "Medicare and Medicaid institute price reductions fairly regularly."

Amis, the mediator, said Hancock was correct in enlisting mediators to facilitate settlements between health care providers and patients.

"The hallmark of the mediation training is neutrality," said Amis, who also was a founding director of the Association of Attorney-Mediators in Dallas. "Rep. Hancock recognizes that fact, except the part about bad faith."

Amis said he and colleagues have made their concerns known and are confident they can improve the law. Amis said he sees the law as an opportunity to educate the public on the benefits of mediation.

"We're engaging in treaty talks, telling John Wayne and Henry Fonda to give it a rest, pitch a tent and smoke a peace pipe," Amis said.