For too long Texas health insurance providers have controlled the healthcare narrative, attempting to vilify healthcare providers while they slowly reduce coverage for consumers and shrink their networks. On one issue in particular, predatory underpayment, health insurance providers have been unchecked by regulation, and Texas consumers are paying the price.
The term insurance providers like to use when referring to predatory underpayment is balance billing, which means passing along the difference between the total cost of care and what is covered by insurance to patients.
“Balance billing is a direct consequence of insurance companies failing to pay healthcare facilities anything close to reasonable amounts. When facilities are reimbursed an unusually low percentage of billed charges, they may seek to collect the remaining balance from patients.”
To better understand balance billing and why it exists, TAFEC has identified three major issues with the current billing structure for emergency care.
No Definition for “Usual and Customary”
Currently, the Texas statue reads that insurance providers are required to reimburse emergency health care providers at the “usual and customary rate” for emergency care. However, there is no definition or uniform guidelines for insurance companies to follow, which has led to insurers determining their own arbitrary rates. While some insurers provide adequate reimbursement for services, others are reimbursing at a much lower percentage, leaving patients to foot the remainder of the bill. Defining a “usual and customary rate” is necessary to hold health plans accountable, ensure healthcare providers are paid sufficiently for their services, and most importantly, to reduce out-of-pocket costs for consumers.
Disregard for Existing Emergency Care Statutes
The Affordable Care Act defined emergency care as an essential healthcare benefit. A person cannot be penalized for receiving emergency care at a freestanding emergency center. This statute is also a component of the prudent layperson laws, which require insurance providers to pay at the in-network benefit level for emergency care when a person believes his or her life is in danger. However, many health plans are not following these regulations and pay at the out-of-network rate.
Recently, insurers have begun including provisions within health plans stating that if a patient goes to a freestanding emergency center and is not diagnosed to have had a medical emergency, the insurer will not pay at the in-network benefit level. This is a direct violation of the prudent layperson standard and is not in accordance with Texas law.
Patient Involvement
Not only are patients being hit with high medical bills that they expected to be covered by their insurance, they are also being dragged into the middle of the mediation process. Disputing medical bills and health insurance claims should involve only health insurers, billing companies, and health care providers, not patients. To truly fix balance billing, a solution would need to remove the patient from the equation altogether.
These three issues must be addressed through comprehensive legislation to improve the healthcare system and protect consumers. TAFEC hopes to start the discussion and collaborate with all stakeholders to develop a workable solution.