Surprise medical bills are a growing problem in Texas. Requests to the Texas Department of Insurance (TDI) to mediate disputes over surprise out-of-network bills between providers, insurers and consumers increased more than 100-fold during the past five years – growing to 4,519 in 2018.
TDI has the power to mediate disputes arising from surprise medical bills, but only if they meet strict criteria. TDI is expecting a 78 percent increase in mediation requests in 2019, on track to reach 8,000. A solution besides mediation is needed – preferably one that reduces billing disputes in the first place.
Surprise medical bills result when patients unknowingly receive care from out-of-network physicians and therapists, or in hospitals, clinics and labs that are not in the provider networks of a patient’s health plan. If an out-of-network provider charges fees higher than the usual & customary price reimbursed by their health plans, patients are required to pay the outstanding balance. The medical establishment refers to this practice as balance billing.
Unfortunately, it appears a small but growing minority of Texas providers are making a business model out of “gotcha!” That is what I call it when providers intentionally blindside their customers with out-of-network, surprise medical bills patients did not anticipate.
The way ‘gotcha!’ works is a few providers – doctors, hospitals, clinics, labs and so on – purposely refuse to join provider networks so they can charge fees well above what is customary for a given service. There is certainly nothing wrong with declining to join provider networks.
The problem is that patients are rarely warned prior to receiving care. Only later, after receiving care, do patients discover they owe substantial medical bills because they were treated by a provider who is out-of-network. Why are patients rarely warned about out-of-network fees prior to care? The likely answer is because the “gotcha!” business model works best when patients are caught off guard and don’t know until it’s too late. If patients knew a provider was out-of-network, most would avoid those providers if they have a choice.
It makes sense the medical providers most commonly associated with surprise medical bills are those physicians, labs and clinics that patients rarely visit prior to receiving care. These include anesthesiologists, radiologists, pathologists and emergency room physicians. Patients can also face surprise bills when an out-of-network therapist works at an in-network hospital, or when a specimen collected at an in-network clinic is sent to an out-of-network lab.
A “gotcha!” happened to a young Texas student in 2017 when her doctor sent a urine sample for a post-surgical drug test to a lab not in her insurance network. Perhaps the lab was intentionally in no network because it charged fees well above what any health plan would pay. The lab arguably took advantage of the student by running multiple drug tests and billing the patient $17,430 when a simple opioid test should have cost no more than $100.
Some clinics and emergency medical facilities intentionally mislead consumers with ambiguous or deceptive language and signs. For instance, some medical providers post signs claiming, “We accept all insurance,” even though the facility may not belong to any insurers’ network. The Texas chapter of AARP reported nearly two-thirds (62 percent) of Texas’ free-standing emergency rooms it contacted incorrectly claimed they were in-network at BlueCross BlueShield but were not actually affiliated with the insurer’s network.
Nobody should be caught off guard by out-of-network medical bills when their in-network doctors or hospitals work with out-of-network labs, clinics or bring in out-of-network providers to assist. The Texas Legislature has passed a few protections in recent years−starting in 2009, with some additions in 2017. However, assistance is not available to help those in health plans not regulated by TDI. This includes most large employer plans that are regulated under the federal Employee Retirement Income Security Act of 1974 (ERISA).
The solution to the growing problem of ‘gotcha’ medicine is to require greater transparency in physician, clinic and hospital bills for those charges to be collectible. In addition, providers should be required to make their network affiliations more transparent to patients. Although health care providers in competitive markets should be free to set their own charges, they should not be allowed to profit from gaming the system, subterfuge and intentionally keeping their network status and prices a secret until it’s too late.
A meeting of the minds (also known as mutual assent) is required to have an enforceable agreement under contract law. Duke University law professor Barak Richman believes the concept of mutual assent could be used to protect patients from excessive out-of-network fees. Too many Texans get a surprise bill despite lacking this necessary condition. Texas should make it more difficult to collect outstanding medical bills when patients are treated by a provider who did not disclose network affiliations or provide a cost estimate prior to care.
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