Texas Senate Bill 1264: Protecting consumers from surprise medical bills


A new senate bill in Texas went into effect 1/1/2020 — Senate Bill 1264: Protecting consumers from surprise medical bills. This law is applicable to all fully insured major medical plans issued in Texas, plus state employees or those with plans via the Teacher Retirement System (TRS).

What does it do?

Bans doctors and providers from sending balance bills (e.g. person goes to an in-network provider for surgery and receives an out-of-network (OON) bill from an anesthesiologist for the amount insurance didn’t cover) to patients in two situations:

  1. Someone has surgery or gets treatment at an in-network hospital or facility but gets care from an ER doctor, anesthesiologist, radiologist, or other provider who doesn’t have a contract with their health insurance plan.
  2. Someone gets treatment for an emergency at an out-of-network hospital or emergency facility.

Under the new law, in these scenarios, the health care provider must apply for arbitration or mediation to resolve the outstanding balance with insurers, they may not balance bill the patient.

What does this mean? 

The law is meant to help keep the patient out of the middle whereas previously, these “surprise” bills were up for the patient to resolve or risk being sent to collections for non-payment. Now, if a patient receives a “balance bill” from unknowingly receiving care for services received on or after 1/1/2020 from an out-of-network provider (Scenario 1 above) or in an emergency situation (Scenario 2), if their plan is fully insured*, the first step is still always to contact the health plan (e.g. call the number on the back of their id card) to ensure the claim was processed correctly. It may simply be a matter of the carrier needing to reprocess the claim.

Remember though, their visit to an emergency room (ER) must be a true emergency, (i.e. an illness or injury which places their health or life in serious jeopardy and treatment cannot be delayed such as difficulty breathing, chest pain, severe bleeding, broken bone or a head injury) not merely something that is urgent (i.e. sore throat, sprain, rashes). If they go to the ER for a non-emergency and it’s is an out-of-network facility, this new law will not be applicable.

However, if for some reason their insurance carrier is not able to be helpful, (e.g. it’s not a claims processing issue, it’s the radiologist sending a balance bill) there is a form for a consumer to fill out to get help with a “surprise bill” from TDI (Texas Department of Insurance). Remember a carrier does not have influence over how an OON provider handles their billing process. An OON provider is not under contract with an insurance carrier.

Additional information about SB 1264 may be found on TDI’s website.

*If one is unsure whether their health insurance plan is fully insured and subject to this new law, insurance cards for state-regulated plans have either “DOI” (department of insurance) or “TDI” printed on them. Click here for health plan ID card examples showing TDI or DOI.

“Takes” or “Accepts” Insurance Doesn’t Necessarily Mean In-Network

Although this video is corny, it is spot on and I couldn’t have done a better job writing a blog on a common problem. A provider saying they “take” or “accept” your insurance does not mean they are in-network. Rather it only means they welcome patients with insurance and generally will submit an insurance claim for their services to your health plan but it’s possible they are out-of-network (OON) and are able to balance bill you for the amount insurance doesn’t pay.

Balance billing is when an out-of-network provider attempts to collect the difference between the amount the provider charged for services and the amount the health plan (insurance carrier) was willing to pay.  Whereas when a provider is in-network, they must accept the “contracted rate” agreed upon with the insurance carrier and may not bill you for the difference.  Currently out-of- network providers are not under this same obligation.

The best way to guarantee the provider you are seeing is in-network is to call your health insurance carrier using the number on the back of your insurance card to confirm or most carriers have online tools for you to search for an in-network provider too.

However, in times of an emergency, it’s not realistic for you to previously have researched and figured out if a facility is in-network, nor may you even have the ability to select the emergency room, treating physicians, or ambulance providers.

Likewise, surprise bills can also arise when you receive planned care. For example, if you schedule a surgery at an in-network facility (e.g. a hospital) only to find out later (when the bill arrives) that the anesthesiologist did not not participate in your health plan’s network. (It’s very common for radiologists, anesthesiologists and pathologists to be OON.) In both situations, you were not in a position to choose the provider nor to determine that provider’s insurance network status.

Situations like these are reasons why there is currently a push in Congress to pass “balance billing” laws to alleviate Americans from receiving a surprise bill. Both parties in Congress agree, you should not be surprised by an out-of-network health care bill. There has not however been agreement on the the best approach to address them. It remains to be seen if a bill can still pass before the Senate’s recess in August.