balance billing

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Executive Order GA-40

On June 19, 2020, the Texas Department of Insurance adopted final rules specifying patient notice and election requirements in order for out-of-network providers to balance bill. The final rules replace similar emergency rules that were adopted on December 18, 2019.

Under the new rules, which are meant to implement legislation passed in 2019 by the Texas Legislature, out-of-network providers are prohibited from Balance Billing for nonemergency services unless a patient elects, in writing, to obtain the service from the out-of-network provider. The patient’s election is only effective if the provider satisfies the following notice and disclosure requirements: (1) the patient is provided with a “meaningful choice between an in-network provider and an out-of-network provider,” (2) the patient is not “coerced” into choosing the out-of-network provider, and (3) the patient is provided with a written notice and disclosure. The notice and disclosure statement must be signed by the patient at least 10 business days before receiving any care.[1]

This is the third and final blog in our Surprise Billing series. Our first two blogs addressed legislation in Texas and California limiting “surprise” or “balance” billing. This article will briefly touch on surprise billing legislation that other states across the nation have implemented, and also look at proposed federal legislation that mirrors those state laws.

In today’s political climate, it is rare to have both sides of the aisle agree on the need to tackle a pressing issue. But leaders from both parties see eye-to-eye when it comes to ending surprise medical billing, a problem that arises in roughly 1 in 5 emergency department visits. However, agreeing that something needs to be fixed is only the first step—agreeing on how to fix it is another, much more difficult, issue. There have been proposals, from both the House and the Senate, with bipartisan support that are based on existing state legislation. Congressional legislation regarding surprise billing is imperative for many Americans, because state legislation does not protect patients enrolled in self-insured employer health plans due to preemption by the Employee Retirement Income Security Act (ERISA).

Senate Bill 1264, which recently passed during the 86th Texas legislative session, places restrictions on certain out-of-network providers regarding the practice known as “balance billing” and establishes a process through which health plans and providers may resolve payment disputes. The bill is effective September 1, 2019 and applies to services and supplies provided on or after January 1, 2020.

I.  Balance Billing and SB 1264

The term “balance billing” refers to when a healthcare provider bills a patient for the difference between the reimbursement provided by the patient’s health insurance and the amount charged by the provider. SB 1264 places restrictions on balance billing by out-of-network (OON) providers of emergency services, facility-based services provided at an in-network healthcare facility, and lab and diagnostic imaging services that are related to an in-network service. The law disallows these providers from billing a patient for an amount greater than the applicable copayment, coinsurance, and deductible under the health plan based on the initial amount determined to be payable by the plan, or if applicable, a modified amount determined under the plan’s appeal process.

On May 23, 2017, Texas Governor Greg Abbott signed Senate Bill (SB) 507, expanding the current law dealing with “balance billing.”

Balance billing occurs when an insured patient receives care from a physician, hospital or other healthcare provider, who is not part of a patient’s health plan provider network. The out-of-network provider then bills the…