February 14, 2019

Texas' plan to fight 'surprise' medical bills has yielded 'quick results' (but also a 4,000-case backlog)

Daily Briefing

    As so-called "surprise" medical bills continue to shock patients across the nation, the Texas Department of Insurance has developed a program to help patients appeal their bills—yielding "quick results" for consumers but also creating a booming backlog of cases, the Texas Tribune reports.

    'Surprise' medical bills, explained in 5 charts

    What are 'surprise' medical bills?

    Cases of "surprise" medical bills—a term that generally refers to unexpected out-of-network bills received by patients who believed their insurer would pay for their care—have drawn widespread media scrutiny.

    In Texas, Drew Calver, a former patient of St. David's Medical Center, recently drew headlines when his insurer agreed to pay only $55,840 of the $164,941 hospital bill he received after heart attack treatment—leaving Calver responsible for the rest. The hospital eventually lowered Calver's bill to $332.29.

    Other headline-grabbing "surprise" medical bills around the country include a $474,725 bill for an air ambulance evacuation, a $5,751 ED bill charged to a patient who declined treatment, and more.

    Texas tries to help patients with surprise bills, but is 'overwhelmed' with requests

    While surprise bills are a challenge nationwide, the Texas Association of Health Plans says they're especially common in Texas, where one-third of ED visits result in surprise bills—a rate that is more than twice the national average.

    To address the problem, the Texas Department of Insurance in 2009 established a mediation program to help patients appeal their out-of-network hospital bills.

    Once patients submit their bills for mediation, providers and insurers have 30 days to negotiate the bill's charges through informal telephone conferences. These informal conversations resolve about 90% of submitted cases, while the rest are sent to the State Office of Administrative Hearings, where officials host a "formal mediation" within 180 days of the patient's original mediation request, the Tribune reports.

    Participation in the program was modest when it first launched, according to the Tribune. But after the state expanded the number of patients eligible to participate, the number of mediation requests "exploded" in 2018, according to Stephanie Goodman, the department's spokesperson.

    Last year, the department received more than 4,500 requests to challenge more than $9 million in hospital charges, the Tribune reports. According to Goodman, the department is "seeing routinely, starting this summer, three to four times the number of requests per month that [it] got last year," and state officials expect the program will receive 8,000 new mediation requests this fiscal year.

    The boom in requests proved to be more than the department could handle, the Tribune reports, leading to a 4,000 case backlog. The department has since hired eight more employees to take on the pileup, and it's looking to add two more.

    Texas' strategy is yielding 'quick results'

    While one state official said it might "take ... a while to get out of [the] backlog," the data show that the improved program has been successful in yielding "quick results" for consumers, according to the Tribune.

    For instance, insurers in 2018 paid an additional $1.6 million to help resolve consumer complaints related to $8.8 million in surprise hospital bills, the Tribune reports.

    According to Goodman, the department does not keep statistics on how much patients end up paying after the mediation process is complete. However, she said, "What we hear over and over from the consumer [is] 'I didn't get another bill.'"

    How lawmakers in Texas—and across the nation—are cracking down on surprise bills

    Despite this success, state Sen. Kelly Hancock (R), who helped establish the mediation program, isn't satisfied. "At the end of the day, no matter how hard we work to improve and expand patient-triggered mediation, patients can still get caught in the middle," he said. "It's time to take this off the patients' plates entirely, and I'll be filing legislation to do that very soon."

    Federal lawmakers are looking to address surprise medical bills as well. A bipartisan group of senators last week sent letters to health care providers and insurers asking questions about their out-of-network billing and payment practices.

    The senators in the letters wrote, "We want to protect patients from costly surprise bills while preventing undue disruption in the health care system," adding, "To meet this goal, it is critical that we receive additional data and more complete feedback in order to refine and inform our legislative proposal."

    President Trump and House Speaker Nancy Pelosi (D-Calif.) separately have vowed to take action on surprise medical bills, the Tribune reports (Root/Najmabadi, Texas Tribune, 2/12; Baker, "Vitals," Axios, 2/13).

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