To Prevent Surprise Medical Bills, Increase Oversight of Insurance Companies

The issue of surprise medical bills is getting plenty of attention in Texas these days, and the freestanding emergency center industry has become a popular target. An innovative model that provides reduced wait times compared to traditional hospital ERs, freestanding emergency centers have increased access to emergency care in a state that sorely needs it. Today, these facilities number more than 325 throughout Texas.

Despite the access they provide, misconceptions about freestanding emergency centers persist, and false accusations of lack of transparency and misleading patients are common. It is telling that this is the narrative coming from health insurance companies, as their responsibility to cover the cost of emergency care for those they insure is at the heart of this issue. That responsibility is outlined in the insurance code statute that includes emergency care as an essential health benefit.

All freestanding emergency center healthcare claims are required by law to be processed at the in-network benefit level or at the usual and customary level, and this is where patients get caught in the “out-of-network” cycle.

Unfortunately, insurers often process freestanding emergency center claims at out-of-network rates, effectively denying their customers access to the coverage for which they are paying. This creates confusion and may result in a higher patient responsibility, commonly referred to as a surprise bill.

The argument that freestanding emergency centers lack transparency is also without merit. In Texas, these facilities are required by law to post signage on the building, in waiting rooms and patient rooms, making it clear to patients that they are in an emergency care facility. Often, patients acknowledge this in writing.

Texas has serious issues with access to emergency care, receiving an ‘F’ grade in that category from the American College of Emergency Physicians. This illustrates why freestanding emergency centers are in demand, because Texans need more options for prompt treatment in the event of a medical emergency.

Health plans benefit from this problem because if there is limited access to emergency care, it is difficult for patients to receive the appropriate care in a timely manner, which only helps the health plans’ profit margin. That is why they discourage Texans from using freestanding emergency centers and instead recommend urgent care facilities, many of which are owned by the insurance companies themselves.

It is important for patients to have the option of mediation when dealing with unexpected medical bills, and TAFEC is working closely with Sen. Kelly Hancock, R-Richland Hills, and his staff on Senate Bill 507, which would allow that. However, as currently written, SB 507 will not significantly reduce surprise medical bills or patient confusion surrounding medical billing. There must also be guidelines set that establish transparency around developing a standard for usual and customary reimbursement by insurers.

Texas law requires insurers to pay for non-contracted emergency healthcare at the usual and customary rate. However, because there are no uniform guidelines for insurance companies to follow, they simply determine their own arbitrary rates. While some insurers provide adequate payment for services, others are paying at a percentage well below what is legally required, which means patients do not receive the full benefit of the coverage they purchased.

To help remedy this, TAFEC recently passed a resolution calling on the Texas Legislature and the Texas Department of Insurance to increase the collection of health insurance payment data. These data are needed for patients and providers to have certainty regarding what constitutes usual and customary reimbursement for emergency room procedures in Texas.

The resolution is part of a larger effort to increase transparency and oversight of the health insurance industry.

Texas Department of Insurance data indicates a systematic attempt by multiple insurance companies to reduce payments to freestanding emergency centers and shift costs to patients. Some even go so far as to intentionally keep freestanding emergency centers out-of-network so they can continue the practice of chronic underpayment of health care claims.

This rampant and intentional underpayment by insurance companies is part of a business model to deny, delay and reduce reimbursement. When insurance companies collect premiums without paying patient claims on time and in full, they are more profitable.

The Texas Legislature should make it a top priority to change the behavior of insurers. Creating a clear, enforceable standard for usual and customary reimbursement rates is a good place to start. Doing so will hold health plans accountable, ensure healthcare providers are paid sufficiently for their services, and most importantly, protect consumers from ever-increasing out-of-pocket expenses.

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