Some Texans are receiving fewer surprise medical bills this year thanks to a new law that prevents the health care industry practice known as balance billing.
SB1264, which passed the Texas House of Representatives with a unanimous 146-0 vote and went into effect on Jan. 1, 2020, forces health care providers and insurance companies to work out emergency care bills in an arbitration process without sending consumers surprise medical bills.
“Patients are the big winners with this initiative,” said Dr. Rodney Young, professor and Regional Chair of Texas Tech School of Medicine.
Are You Affected by the New Surprise Medical Billing Law?
SB1264 does not apply to all Texans with insurance but affects only those people enrolled in state-regulated fully-insured health plans.
Fully-insured insurance plans, regulated by the Texas Department of Insurance (TDI), are plans where health insurance claims are paid directly by your insurance company.
The majority of health insurance coverage in Texas is provided by self-funded employer plans. These plans, where the employer pays the health claim even if the insurance company administers the insurance benefits, is not covered by the new law.
It should be noted that self-funded insurance plans are regulated not by the state of Texas but by the U.S. Department of Labor under the Employee Retirement Income Security Act of 1974 (ERISA).
The Texas Tribune estimates that about 16 percent of Texans have state-regulated fully-insured insurance plans. Most state employees and public school teachers have such plans, as well as those who have insurance through the Affordable Care Act marketplace and some via their private employers.
If you are in doubt as to the type of insurance you have, check your insurance card and a “TDI” or “DOI” designation signifies a health plan that is state-regulated.
Balance Billing: An Unwelcome Surprise for Patients
Balance billing often happens when patients are treated at an out-of-network emergency care facility but can even occur when treated at an in-network emergency care facility by a provider that is not in the insurance provider’s network.
It is not unusual for a patient to seek emergency care at an in-network facility, pay their insurance co-pay, and then later receive surprise medical bills because lab tests or imaging were provided by an out-of-network group.
University of Chicago research institute NORC found in 2018 that half of all Americans receive some sort of surprise medical billings with the number one unforeseen charge coming from services provided by out-of-network physicians groups.
What the New Law Covers
As of Jan. 1, 2020, Texans with state-regulated health plans will no longer be in the middle of these billing tug of wars between health care providers and insurance companies.
These disputes can take months to resolve, with patients often receiving multiple bills, and sometimes threats of collection agency action, if the bill balance is not immediately paid.
SB1264 prevents health care providers from billing patients until they have arrived at a fair cost solution for charges with the insurance company. Insurance providers and health care providers must enter the state-mandated arbitration process to settle the billing dispute.
Patients are still responsible for all deductibles and co-pays as per their insurance plan.
Patients with state-regulated health plans, can still receive balance billing in non-emergency situations if they intentionally receive care from out-of-network providers.
At Employer Flexible we also do not believe in surprise billing so contact us to learn more about how your Texas business can benefit from our stress-free HR services with no hidden costs.