Navigating health insurance can be treacherous.
Premiums are high, deductibles are higher. Some plans have rules about referrals, most have penalties for going outside the network.
So when a patient does everything by the book and still gets hit with an extra bill — often totaling thousands of dollars — something’s wrong. It’s also something the Texas Legislature can fix.
Texas lawmakers are currently working to end the practice known as “surprise billing.” This primarily affects patients treated in the emergency room, where many doctors are out of network. It also occurs within network facilities when certain specialists, such as anesthesiologists, are not part of the network.
In Texas, 1 in 3 ER visits results in a surprise bill compared with 1 in 5 nationwide, according to a study in Health Affairs magazine.
Under a Senate bill that could have a committee vote this week, insured patients would be responsible only for their usual share of covered costs, such as deductibles and copays. Unexpected out-of-network charges — or surprise bills — would be settled between providers and insurers, and patients wouldn’t be pulled into the dispute.
At a hearing on March 21, everyone seemed onboard with the plan except the Texas Medical Association.
“We support the spirit” of the bill, said Dr. Jason Terk, a Keller pediatrician and chair of the association’s council on legislation, but “we’re opposed to the means.”
“I think you’re opposed to something else,” countered Sen. Kelly Hancock, R-North Richland Hills, who authored the bill. “And [you] want to use the patient to get your something else.”
That would be money, of course, or what the industry often calls reimbursement rates.
To see a doctor in an emergency room in Texas, the median out-of-network charge is $1,355. That compares with a network rate of $483. And Medicare and Medicaid patients are charged less than $200, according to data cited by the Texas Association of Health Plans.
“Over and over again, research has shown that staying out of network is a lucrative business model for ER doctors and freestanding ERs in Texas,” Jamie Dudensing, CEO of the health plan association, said in written testimony.
Out-of-network providers are often paid three times the amount negotiated by in-network providers, she wrote, and then turn around and bill patients for more. Some cases make national news.
Drew Calver, an Austin school teacher, suffered a severe heart attack in early 2017 and was rushed to St. David’s Medical Center. While the facility was out of network for his health plan, the hospital told him his insurance would be accepted. But it wasn’t nearly enough.
The bill, which included four days in the hospital and four stents, totaled almost $165,000. Calver’s insurance paid nearly $56,000. He was billed for the rest.
National Public Radio and Kaiser Health News picked up on his story and it went viral. Public pressure mounted. Eventually, the hospital lowered the $109,000 bill to just $300, he said.
“Not everybody has the luxury of using the national media to fix their problems,” Calver told the Senate Committee on Business and Commerce.
Under SB 1264, patients like Calver would never get a surprise bill again. They would be responsible for the deductibles and copays spelled out in their health plan. But additional charges would be settled between the provider and insurer, and if necessary, they could use state mediation.
The goal is to get patients out of the middle, Hancock said, and several witnesses cited the emotional strain from big debts and bill collectors.
“I feel like I was exploited at the most vulnerable time of my life,” Calver said.
Stories like his are so common that Kaiser Health News launched an investigative series titled, “Bill of the month.” In addition to Calver’s case, there’s a report on a Southlake radiologist who was charged over $56,000 for an air ambulance flight after a serious arm injury.
His insurance company paid almost $12,000 — after he appealed the insurer’s initial rejection. Then he was billed for the remainder, over $44,000.
Surprise billing has registered with the public, in part because many have had the experience. And in 2018, two-thirds of survey respondents said they were “very worried” or “somewhat worried” about being able to afford unexpected medical bills. Far fewer were concerned with paying for rent, utilities, deductibles and premiums, according to the Kaiser Family Foundation survey.
Texas has had protections against surprise billing since 2009, when Hancock first tackled the issue. But the law does not apply to self-funded health plans governed by federal rules, which account for about 40 percent of Texas’ health insurance market.
Texas also requires patients to initiate the mediation process, and many don’t realize they have the option. Witnesses said some providers threatened to eliminate negotiated discounts if the patients went to mediation.
An estimated 125,000 Texans get surprise bills every year, and 4,500 sought mediation in 2018, according to the Texas Department of Insurance. In general, the efforts were well worth it.
Since 2015, Texas patients have saved nearly $33 million through the mediation process, Hancock said. That’s the difference between billed charges and the amount paid — a discount of roughly 85 percent. Over 9 in 10 cases were settled with a phone call, stopping short of formal mediation.
Nine states, including California, New York and Florida, have a comprehensive approach to surprise billing, according to the Commonwealth Fund. Texas would be among the national leaders if it passes SB 1264, Hancock said.
The proposal has widespread support, including from AARP, the Texas Hospital Association, the left-leaning Center for Public Policy Priorities and the right-leaning Texas Conservative Coalition.
“It says something when you have two think tanks like CPPP and TCC on the same page on this,” Mia McCord, president of the conservative group, told the senators.
Who’s on the other side? The Texas Medical Association, which has over 52,000 members, blamed insurance companies and their narrow networks.
It “strongly” opposed SB 1264, as initially written, calling it a “big insurance power grab.” It sent a flyer to lawmakers with the headline: “Hold health insurers accountable for the products they sell to Texans.”
“When physicians are not part of a network, it is generally because we either have no choice or no bargaining power,” said Terk, the Keller pediatrician.
When he addressed the committee, the discussion often focused on ways to determine fair payment and whether billed or negotiated charges should be central.
Hancock later met with authors of related bills in the House and Senate, and said they agreed on “a mechanism” to arrive at a rate. The revised bill could be ready for a committee vote this week, Hancock said in a phone interview, and he was adamant about patients getting the protection they deserve.
“The only question is when,” Hancock said. “Because we will not quit until we prevail.”
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