January 18, 2017 —

New Bill Would Equip Consumers With Greater Protections to Challenge Exorbitant Surprise Medical Bills

AUSTIN—The Texas Association of Health Plans (TAHP), the statewide trade association representing commercial and public health plans operating in Texas, today applauded Texas Senator Kelly Hancock’s introduction of legislation to significantly expand protections for Texas consumers against the growing practice of surprise medical billing, also called “balance billing.” Surprise or balance billing occurs when insured patients receive out-of-network care, often in an emergency care situation, and are billed by a provider for fees that exceed the amount paid by the insurance—charges that can be 10-20 times the going rate. Texas is home to some of the highest surprise billing rates and emergency care costs in the nation.

Sen. Hancock’s legislation, SB 507, would expand mediation protections, already being successfully used on a limited basis by consumers in Texas, for insured consumers with PPO plans to all emergency providers, including all freestanding emergency rooms, and to all of out-of-network providers working at a network facility. Mediation is a process by which s a process by which consumers can challenge surprise medical bills and leave the dispute to the insurer and provider. This legislation builds on a law written by Sen. Hancock in the 84th Legislature that made mediation available to consumers who were balanced billed by six types of facility-based providers: radiologists, anesthesiologists, pathologists, ER physicians, neonatologists and assistant surgeons.

“Home to the majority of the nation’s freestanding ERs, Texas has become ground zero for the explosive growth of emergency care costs and rates of surprise medical billing,” said Jamie Dudensing, TAHP CEO and a former practicing nurse. “TAHP applauds Sen. Hancock’s efforts to better protect consumers against this growing trend, to require greater protections for consumers against surprise billing by freestanding ERs and other emergency care providers, and to ensure consumers have more options to challenge exorbitant, surprise medical bills often waiting for them in the mailbox after they’ve been treated in an emergency situation.”

Texas has some of the highest rates of out-of-network emergency providers in the country.

  • Up to 56 percent of hospitals in Texas that are in-network with the three largest insurers in the state have no in-network emergency physicians.
  • Texas’ three largest insurers had an average of 41 to 68 percent of emergency room physicians’ charges billed out-of-network at in-network hospitals.
  • A majority of the nation’s freestanding ERs are located in Texas and are out of network. Nearly 70% of out-of-network claims in Texas stem from freestanding ERs.

Specifically, SB 507 would:

  • Expand mediation protections to consumers that have a PPO plan to address balance billing through mediation to all emergency providers and to all out-of-network providers working at a network facility.
  • Allow mediation of balance bills from all types of out of-network providers treating patients at in-network hospitals and other facilities, including free-standing emergency departments. (Current law applies only to the six listed types of facility-based physicians: radiologists, anesthesiologists, pathologists, ER physicians, neonatologists and assistant surgeons).
  • Allow mediation of balance bills for emergency care from any provider or facility of emergency care services, including freestanding emergency departments.
  • Expand disclosure requirements regarding network status and balance billing by insurers, facilities and other health care providers including the requirement that the following statement be included on balance bills: “This is a balance bill that may be eligible for mediation.”
  • Expand mediation protections to the Teachers Retirement System (Already applies to the Employee Retirement System).

Copies of TAHP’s one-pagers on surprise medical billing and freestanding ERs can be found on pages 11-14 in our 85th Legislative Priorities Booklet here.


The Texas Association of Health Plans

The Texas Association of Health Plans (TAHP) is the statewide trade association representing private health insurers, health maintenance organizations, and other related health care entities operating in Texas. Our members provide health and supplemental benefits to Texans through employer-sponsored coverage, the individual insurance market, and public programs such as Medicare and Medicaid. TAHP advocates for public and private health care solutions that improve the affordability, access and accountability of health care for many Texans. As the voice for health plans in Texas, TAHP strives to increase public awareness about our members’ services, health care delivery benefits and contributions to communities across Texas.