Bipartisan Senate, House Legislation Would Protect Texans From Price-Gouging At Freestanding ERs

May 12, 2019

AUSTIN—State Sen. Kirk Watson, D-Austin; Sen. Nathan Johnson, D-Dallas; and Rep. Dade Phelan, R-Beaumont, have filed legislation that would allow the Texas Attorney General to take action against freestanding emergency rooms that charge consumers unreasonable prices for health care services. The power granted by the legislation is similar to the Attorney General’s existing ability to stop entities that price-gouge Texans seeking goods and services during natural emergencies and declared disasters.

Texas freestanding ERs, which are responsible for 83 percent of all out-of-network emergency room services and lead to more than $3 billion a year in avoidable health care costs, are a major driver of Texas’ out-of-network emergency care problem and high health care costs. These facilities charge emergency care prices but, usually look like urgent care centers and attract patients seeking treatment for minor conditions.

A recent investigation found many Texas freestanding ERs mislead patients. When patients receive emergency care from out-of-network facilities, they run a high risk of receiving expensive surprise medical bills. According to the study:

  • 77 percent of freestanding ERs use confusing language like they “take” or “accept” insurance when they are out of network for any major health plan,
  • nearly 30 percent of freestanding ERs claimed they were in Blue Cross and Blue Shield of Texas’ network when they were not, and
  • 30 percent of freestanding ER websites do not comply with state network transparency laws.

“Many freestanding ERs in Texas mislead consumers, and Texas patients are paying the price with some of the most expensive ER costs in the nation,” said TAHP CEO Jamie Dudensing. “TAHP supports protecting Texans from these outrageous prices and holding these bad actors accountable for price-gouging and deceptive advertising.”

Because freestanding ERs are rarely in network with patients’ health plans, care often leads to expensive surprise bills for basic conditions like fever, sore throat and cough. In fact, freestanding ERs charge about 20 times what urgent care centers and primary care doctors charge for these common conditions, and often charge more than traditional hospital-based ERs.

SB 866 and HB 1941 would:

  • Protect Texans from financially-devastating freestanding ER charges when they seek help in a personal emergency.
  • Declare unconscionable prices for emergency care or other care at freestanding ERs unlawful in Texas and define a price as “unconscionable” if it is at least 200 percent over the average hospital charge for a similar service.
  • Allow the state to take action to stop freestanding ERs from engaging in unconscionable pricing by requesting a court to issue a temporary restraining order or permanent injunction against the facility, and by allowing courts to impose civil penalties or, including up to $250,000 in civil penalties when a freestanding ER charges an elderly Texan an unconscionable price for emergency care.