Capitol Update: No More Surprises

July 31, 2019

Dear Friends,

Have you ever been hit with a surprise medical bill?

Maybe you experienced an emergency and had to rush to the nearest hospital or urgent care center. Perhaps you scheduled a planned procedure with an in-network doctor at an in-network facility, but ended up getting “balance billed” by an on-call anesthesiologist or other medical provider you couldn’t choose or research beforehand. Or, like too many of us, maybe you left your doctor’s appointment having covered your co-pay and any other upfront charges only to receive a huge bill after the fact from a lab that ran a physician-ordered test. Did you get to pick what lab that test went to and verify that your insurance would cover it? No.

All of these situations are what we call surprise medical bills… circumstances where the patient has no choice. I’ve spent the past decade fighting to get rid of them.

HB 2256 signed into law by Gov. Rick Perry (2009)

In 2009, after a sizeable special interest battle, I was able to pass the first step, HB 2256. This legislation established a mediation process at the Texas Department of Insurance (TDI) for patients with state-regulated health plans who received surprise bills of more than $1,000 from certain providers. Patients could contact TDI for help negotiating a surprise bill, either lowering it or eliminating it in most cases. In 2015, we expanded the program by adding in additional types of providers and lowering the eligibility threshold to $500. In 2017, we expanded the law again to loop in all emergency providers, including freestanding ERs, and all out-of-network providers working at in-network facilities.

The good news? Mediation works! According to TDI, surprise bill mediation has saved Texas patients nearly $45 million in out-of-pocket healthcare costs since 2015, when the agency began tracking this data.

But, despite the mediation program’s success, many patients were unaware that help was out there. And even those who did see savings due to mediation still had to deal with the stress and time investment it took to fight a surprise medical bill when they should be focused on their own health and recovery instead.

Let’s be clear: In these cases, there is no free market for consumers. The market exists only between health plans and physicians or facilities, and the average Texan was getting caught in the middle of an industry billing dispute… confused, frustrated, and holding a big bill. So it was time for the next step: completely eliminating surprise medical billing.

SB 1264 signed into law by Gov. Greg Abbott (2019)

This year, we made that happen. SB 1264 prohibits surprise balance billing of consumers by out-of-network providers for emergency services, facility-based services at a network hospital, and lab and diagnostic imaging services that are related to a network service. In other words, in situations where the consumer has no choice over who provides their care, they cannot be surprise-billed for services rendered on or after January 1, 2020.

The legislation maintains the mediation process for health insurance companies and providers to work out disputes amongst themselves, also adding in a binding arbitration option, but the bottom line is this… the consumer can no longer be put in the middle. No more surprises!


Kelly Hancock
State Senator, District 9
Chair, Business & Commerce
Vice Chair, Transportation

P.S. If you’ve received a surprise medical bill and need assistance fighting it, please contact the TDI consumer helpline at 1-800-252-3439 or visit to learn more.

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