Prioritize Addressing Abuse in the Texas Commercial Market
April 22, 2021
By: Jamie Dudensing
While the Texas Legislature has devoted considerable resources to combating fraud, waste and abuse in the state’s Medicaid program, little has been done to combat the same issues in the commercial insurance market where abuse is 50% more prevalent and costs $75 billion more than in Medicaid.
The Texas Penal Code currently allows for investigation and prosecution of abuse in the Texas Medicaid program, but no corresponding provisions exist to prosecute abuse in the commercial insurance market. HB 3235 by Klick addresses this discrepancy by applying the same standards and penalties for abuse in the Medicaid program to abuse in the commercial health insurance market.
A significant amount of care delivered to patients is not evidence-based and is dangerous. As Dr. Marty Makary, M.D., M.P.H., writes in his book, The Price We Pay, “Overtesting, overdiagnosing, and overtreatment are now commonplace in some areas of medicine.” Research has also highlighted significant gaps between evidence-based practices and the care delivered to patients. Doctors themselves believe that up to 30% of all ordered medical care is unnecessary or unsafe. Over 20% of diagnostic imaging is inappropriate, including over 60% of lumbar spine MRIs and over 30% of MRI studies for shoulder pain and knee pain.
We already waste billions of dollars on duplicative, unnecessary, and wasteful services—between $200 billion and $800 billion is spent on unnecessary services ordered by doctors, such as repeated and excessive testing and treatment, each year. Health care fraud and abuse translates directly into higher premiums and out-of-pocket expenses for Texans and can lead to reduced benefits or lost coverage. Health care fraud increases employer cost of providing insurance benefits to employees which, in turn, increases the overall cost of doing business. For many Texas families and businesses, increased expense resulting from fraud and abuse could mean the difference between having health insurance and choosing to forgo it.
The COVID pandemic has also highlighted the need for the Legislature to address abuse in the commercial health insurance market. Headlines about price gouging for COVID tests have been in the news for months, but a less reported-on problem is the abuse that is part of these situations when a freestanding emergency room orders additional, expensive, unneeded care that goes far beyond a patient’s need for a COVID test and bills for the cost of both the test and the additional care.
To address high prices in the Texas health insurance market caused by fraud, waste, and abuse, the Legislature should strengthen Texas’ ability to investigate and prosecute abuse in the commercial health care market. HB 3235 directs the Texas Department of Insurance (TDI) to prioritize the investigation of abuse using the authority currently given to them in the Insurance code to investigate acts of insurance fraud. Giving TDI this additional authority and incentive to address abuse in the commercial health insurance market will translate into saved health care dollars and will aid in controlling the runway cost of health care in Texas.