By TCCRI Staff. Oct. 28, 2019
Comments on Texas Department of Insurance Proposed Rules to Implement Senate Bill 1264 (86R)
Submitted via email to: ChiefClerk@tdi.texas.gov
Background: The Need for SB 1264
In 2016 the total cost of healthcare in the U.S. reached $3.3 trillion and, according to the federal Centers for Medicare and Medicaid Services (CMS), is projected to grow to an astounding $5.7 trillion by 2026. A multitude of factors have contributed to this meteoric rise- some are positive, such as longer life expectancies- while others, such as the growing costs of prescription drugs, larger segments of the population with chronic conditions such as diabetes and heart disease, and intrusive government mandates- are not.
One issue that both increases overall costs and can lead to devastating financial consequences for individual consumers is surprise medical billing, which occurs when patients receive a surprise bill for care from out-of-network providers. Because these providers are outside of a negotiated health plan’s network and rates, they can charge any price for their services, with the patient often left on the hook to pay most, or all, of the bill. Very often, consumers are unaware that such providers are not part of their health plan’s network, as a surprise bill can occur when a patient seeks care at an in-network facility (i.e. hospital) only to later learn that the treating provider within that facility (i.e. ER physician, radiologist, anesthesiologist, etc.) was out-of-network (OON).
Although Texas had some safeguards in place to help with surprise billing prior to the 2019 session, there were loopholes that resulted in Texans continuing to receive astounding hospital bills. With stories of staggering surprise medical bills resulting in home liens and crippling debt garnering both state and national headlines, the 86th Legislature passed Senate Bill 1264, a bipartisan measure that tightens the loopholes on surprise billing, requires certain notifications on patient explanation of benefits (EOBs) surrounding such claims, and establishes a framework for health insurers and providers to reach a fair resolution on payment of surprise medical bills through an arbitration process.