Surprise Billing Legislation Passes Texas Senate With Arbitration Provision

May 12, 2019

The momentum behind balance billing legislation in Austin is growing, as the Texas Senate has passed SB 1264 29-2 on Tuesday to further prevent surprise billing in Texas. The Texas Tribune reports that the only dissenting votes were physician Republican senators Donna Campbell of New Braunfels and Sen. Charles Schwertner of Georgetown.

A bipartisan, bicameral press conference announced an agreement for a bill that is making its way through the Texas Senate this week. The bill is similar to what has beenwritten about before, but a new provision gives the Texas Department of Insurance more power to settle surprise bills, and the Texas Hospital Association has some concerns.

For around a decade, Texas has been working to ameliorate the impacts of balance billing, when providers bill patients for the difference between their charge and what the insurance company covers. Often times, these balance bills occur when patients are in an emergency situation and don’t have a choice where they are receiving care, or in the case of emergency which physicians, radiologists, or anesthesiologists are taking care of them. When those doctors are out of network for the insurers, patients would receive the balance bills.

Bills have been passed allowing patients to trigger a mediation process for balance bills, but the 2019 version of the legislation would keep the patient out of the process and have the insurance company and provider settle the bill without the involvement of the patient. A new revision to the bill combines several versions of the bill and enables TDI to be the arbitrator rather than the mediator.

This means that rather than TDI facilitating a conversation for the two entities, it will have the power to decide who pays what. Representative Trey Martinez Fisher noted during the press conference that the added provision will improve enforcement of the price agreement, as it gives the Attorney General and agencies that regulate the participants in arbitration enforcement authority under the bill. The newest version of the bill also prohibits surprise billing for out-of-network lab work and imaging services.

But not all the parties are happy with the changes.

The Texas Hospital Association has long been a supporter of the end of surprise billing and removing the patients from the process, but the arbitration provision worries the organization. The feel that TDI has too much power in being able to make decisions that could benefit one party or another without the ability to negotiate further. “We don’t want to cause unintended consequences,” says THA President Lance Lunsford.

The mediation process, THA believes, will allow for a more collaborative process where a true middle ground will be found. In theory, one side of the other could throw out an offer that wasn’t realistic and hope that TDI decides in their favor, when previous iterations forced the provider and insurer to come to an agreement. “We want to make sure we are part of the solution,” says Lunsford.

Senator Kelly Hancock, who has championed this measures since 2009, noted that in 95 percent of the surprise bills, a resolution is reached between the insurance and provider. He emphasized the bipartisan nature of the bill as an example of how Texans work together and can lead the nation when they do. “We are putting parties aside and putting forward the best interest of all Texans,” he said at the press conference.

The bill will be an eligible for a vote on the Senate floor this week, and is joined by a separate bill that will allow federally regulated, self-funded health plans to opt into the protections of the bill.