Houston Chronicle: Texans off the hook for ‘surprise’ medical bills [Editorial]
By The Editorial Board
It sounded like a big victory for Texas patients: A new state law protects them from sticker shock if they receive an unexpected medical bill from a doctor who wasn’t in their insurance provider network.
But the victory wasn’t as big as it seemed.
The law signed last month by Gov. Greg Abbott applies only to Texans who buy insurance policies regulated by the Texas Department of Insurance. Left out is the 40 percent of the Texas insurance market, including employee benefits programs self-funded by large companies, regulated by the federal government through the Employee Retirement Income Security Act (ERISA).
Texas’ new law takes effect in September. It was authored by state Sen. Kelly Hancock, R-North Richland Hills, who has been trying to protect patients from surprise medical bills for 10 years. It was Hancock’s 2009 bill that created a mediation process to settle billing disputes between medical providers and patients whose insurance companies wouldn’t cover out-of-network charges.
Mediation since 2015 has saved Texans more than $42 million in health care costs not paid by their insurers, including $8 million last year alone, according to the insurance department. But despite outreach efforts, many patients never knew they were eligible for mediation. They instead scraped up the cash to pay any balance owed after their insurance company kicked in its obligated share.
That shouldn’t happen as often under the new law, which takes consumers out of the equation by replacing mediation between the patient and insurer with what Hancock calls “baseball arbitration,” where an intermediary with medical billing expertise settles the dispute.
“It forces both parties to be more realistic in setting actual charges and payments,” Hancock told the editorial board. “The settlement is based on whoever comes closest to what the arbitrator believes is the fair market price. Whoever is farther away from that number is going to lose.”
A companion bill that would have made arbitration available to self-funded insurance plans was abandoned during the last legislative session. Hancock explained that participation would have been voluntary since those plans follow ERISA rules instead of TDI regulations. “Hopefully, we will see Congress address the issue,” he said.
That may not happen. Hospitals are opposing a bill in the U.S. Senate they say amounts to price-setting. The legislation would require insurance companies to pay out-of-network doctors at a rate tied to in-network fees for a specific treatment or procedure. Doctors, hospitals, and other medical facilities would be banned from “balance billing” patients an amount above what they are paid by the insurer.
“In short, the federal government would bind doctors and hospitals to the terms of contracts they haven’t signed,” said Heritage Foundation fellow Doug Badger in a commentary for the Daily Signal. Badger said physicians have a right to set fees for their services. He said the better solution is to make sure patients know beforehand that they are seeing someone out-of-network.
That may sound reasonable, but not when the patient is in an emergency room or similar situation and has little option but to receive treatment then and there.
The success of Hancock’s legislation despite initial opposition by the Texas Medical Association is reason to believe Congress can find a similar solution for patients with federally regulated insurance policies. In fact, TMA President David Fleeger said the physicians group would help write the rules TDI will use for arbitration under the new statute.
It’s good to see Texas join the 25 states that already have laws protecting patients from unexpected medical bills. Now it’s time for Congress to extend that protection to more Americans. Even President Trump says he wants that to happen. He agrees that people shouldn’t open their mail to find a doctor’s bill jarring enough to make them sick.
