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February2017|

A Texas-Sized Problem: How to Limit Out-of-Control Surprise Medical Billing

ByStaceyPogue,pogue@cppp.org

Evendiligentpatientswhoaskalloftherightquestionscangethitwithsurprise,out-of-networkmedicalbills.Thisisespeciallylikelytohappeninanemergency,whensickorinjuredTexansmustrushtothenearestemergencyroomandhavenoabilitytochoosethedoctorswhotreatthemorconfirmtheyarepartoftheirinsurancenetwork.

Surpriseout-of-networkmedicalbills,sometimescalled“balancebills,”happenwheninsurersanddoctorsfightingoverpricesjointlypassthebucktoapatientwhoreceivedout-of-networkcareunknowingly.TheTexasLegislature,longfrustratedbythispractice,developedamediationsystemforsurprisebillsin2009andimprovedthesystemin2015.Whenpatientsareabletoaccessthesystem,itworkswell.Disputesarealmostalwaysresolvedwithaphonecallbetweenthedoctor’sofficeandinsurer,withactualmediationrarelyneeded.

Unfortunately,veryfewTexaspatientshavemanagedtoaccessthesystem–only3,824since2009.Weestimatethat250,000Texanswhohaveamediation-eligiblehealthplanwillgetasurprise,out-of-networkmedicalbillinatwo-yearperiod.Inotherwords,onlyaverysmallfractionofTexanswithsurprisebillsgethelp.

MediationinTexasisnotanautomaticconsumerprotection.Beforetheycanevenrequestmediation,patientsmustfirstovercomeseveralhurdles.Theseincludedecodingtheirmedicalbills,knowingaboutmediation,andthennavigatingthemediationsystem—allwhilerecoveringfromtheillnessorinjurythatsentthemtothehospital.Patientswhoareabletocleartheseinitialhurdlesmaystillbestymiedbyloopholesthatmakemanysurprisebillsineligibleformediation.Patientscanonlymediatesurprisebillsfromcertaindoctors,forcareprovidedatcertainhospitals,andonlyifthebillexceedsanarbitrary$500threshold.

TworecentnationalstudiesshowthatTexasisoneoftheworststatesforsurprisemedicalbillsfromemergencymedicalcare.CPPP’sanalysisofdatafromPreferredProviderOrganization(PPO)plansshowsthatTexaspatientsareroutinelytreatedbyout-of-networkdoctorsatin-networkhospitalERs.Astaggeringshareofhospitalsdonothaveevenasinglein-networkemergencyroomphysicianforoneormoreinsurerscoveringthehospital,guaranteeingthatemergencytreatmentwillbeperformedbyout-of-networkdoctorsformanypatients.Therearemorethan300hospitalsinTexaswherethehospitalitselfisin-network,butthereisnotasinglein-networkERdoctoravailablewithatleastoneofthethreelargeinsurersexaminedinthisstudy.Ontheotherendofthespectrum,wefoundfourno-surpriseERsinTexaswherethehospitalwasin-networkwithallthreelargeinsurersinthestudyandallERphysicianbillingwasalsoin-network.

Inrecentyears,statesincludingFlorida,California,NewYork,andIllinoishaveimplementedpatient-centeredpoliciestoaddresssurprisemedicalbills.Theyprotectpatientsbothfromsurprisebillsandtheburdensofnavigatingamediationsystem,whileensuringdoctorsandinsurerscanreachafairpricethroughdisputeresolution.

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Attheendof2016,boththeTexasSenateBusinessandCommerceCommitteeandtheTexasDepartmentofInsurancerecommendedexpansionofTexas’mediationsystem,makingprospectsgoodforadditionalimprovementsduringthe2017legislativesession.TherearemanywaystheLegislaturecantakeincremental,yetmeaningful,stepstoimprovepatients’accesstomediationbyreducingthebarriersoutlinedinthisreport.Ultimately,thebestandmostcompletesolutionforpatientsthatbuildsoffofourexistingsurprisebillmediationsystemwouldincorporatethefollowingprinciples:

• Protectpatientsfromsurprisebillsiftheydidnotchooseorcouldnotavoidout-of-networkcare.Especiallyinemergencies,butalsowhenpatientsgetcareatanin-networkfacilitybuthavenoabilitytochooseanin-networkphysician,surprisebillingshouldbeprohibited.Patientsarealreadyresponsiblefortheirexpectedpremiums,deductibles,andcopayments.Theyshouldnotbesubjecttosurprisebillsbeyondthoseamountswhentheyunknowinglyreceivedcareoutofnetwork.

• Ensuredoctorsandotherprovidersandinsurershaveatrustedsystemthroughwhichtheydirectlysettleout-of-networkpaymentdisputes.Insteadofoffloadingbillingdisputesontopatientsthroughsurprisebills,insurersandprovidersshouldsettletheirdisputesdirectlyusingTexas’mediationsystem.Providersand/orinsurersshouldinitiatemediation,notpatients.

• Closetheloopholes.Allsurprisebillsstemmingfromamedicalemergencyortreatmentfromanout-of-networkprovideratanin-networkfacilityshouldbeeligibleformediationwithnoloopholes.Mediationshouldcoverallprovidersofemergencycare,includingfacilitieslikehospitalsandfree-standingERsandallphysicianspracticingatin-networkfacilities,regardlessoftheirspecialty.Thearbitrarylimitthatallowspatientstorequestmediationonlyforsurprisebillsthattop$500shouldberemoved,andaccessshouldbeequalacrossallpublicemployeeplans.

Surprisebillingprotectionsshouldbenefitallpatients,notjustthefewwhoareabletounderstandcomplicatedmedicalbills,determineifabilliseligible,knowabouttheirmediationrights,andnavigatethemediationprocess–allwhiledealingwith

theaftermathofamedicalemergencyorhospitalization.

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Whatisasurprisemedicalbill?Insurancecompaniesanddoctorsorotherhealthcareprovidersoftendisagreeaboutpricesforhealthcare.Doctorsandotherhealthcareproviderswanttochargehighratesandinsurancecompanieswanttopaylowrates.Thedifferencebetweentheamountthedoctorchargesandtheamounttheinsurerpayscanbelarge.Whenpatientsreceivetheirhealthcarewithintheirinsurer’sprovidernetwork(in-networkcare),theydon’thavetoworryaboutthisdifferenceincostexpectations.In-networkdoctorsorotherhealthcareprovidershaveagreedinadvancewithaninsurancecompanyaboutpaymentrates.Within-networkcare,patientswilloweonlytheirrequireddeductibles,copayments,andcoinsurance.Butwhenpatientsunknowinglygethealthcareoutsideoftheirinsurer’snetwork(out-of-networkcare),patientsareatriskforsurprisebills.Wheninsurersandout-of-networkproviderscannotagreeonafairprice,toooftentheyjointlyoff-loadthepricedifferenceontothepatient.Thisisasurpriseout-of-networkmedicalbill(alsocalledabalancebill,becausepatientsarechargedthebalancethatisindisputebetweenthedoctorandinsurer).Surprisebillsorbalancebillsarechargedtopatientsontopoftheirexpected,out-of-networkdeductibles,copayments,andcoinsurance.

Surprisebillshappenwheninsurersanddoctorsfightingoverpricesjointlypassthebucktoapatientwhoreceivedout-of-networkcareunknowingly.

Whenpatientsgetout-of-networkcareunknowinglyInemergenciesMostTexanswillendupinanemergencyroomatsomepoint,andwhenthere,willgenerallyhavenoabilitytoensuretheircareisin-network.Inanemergency,patientsoftenlackthetimeorabilitytodetermineifahospitalisin-network.Also,inemergencies,patientsgenerallygetnochoiceinproviders.Patientsdon’tgettopickwhatambulanceshowsupwhentheycall9-1-1,whichERtheambulancegoesto,orwhichdoctorattheERprovidescare.

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ERtripsgenerallyresultinatleasttwomedicalbills—onefromthefacility(hospitalorfree-standingER)andanotherfromphysician(s)whoprovidedtreatment(suchasemergencyroomphysiciansandradiologists).Patientsmayunknowinglygetcareinanout-of-networkfacility,ifforexample,theclosestERthatapatientisrushedtodoesnotparticipateinthepatient’sinsurancenetwork.Inthesecases,patientsmaygetasurprisebillfromthefacility.

Inothercases,patientsinanemergencywillgettoanin-networkhospital,butstillreceiveout-of-networkcare.Patientshaveareasonableexpectationthatiftheygotoanin-networkhospital,alloftheircarewithinthehospitalwillalsobein-network.Butmostpatientsdon’tknowthat,inmanycases,thedoctorswhopracticeatahospitalarenotemployeesofthehospital.Hospitalsandotherfacilitiescommonlycontractwithgroupsofdoctorsorindividualphysicianstoprovideserviceslikeanesthesiology,emergencydepartmentphysicianservices,neonatology,pathology,andradiology.Thesecontracteddoctorsdonotnecessarilyparticipateinthesameinsuranceplansasthehospital.Infact,forsomespecialtieslikeemergencyroomphysiciansandanesthesiologists,itisrelativelycommonfordoctorstobeout-of-networkeventhoughthehospitalisin-network(seeFigure2).Inthesecases,patientsmaygetasurprisebillfromoneormoredoctors.

Goingtoanin-networkhospitalandleavingwithout-of-networkbillsisunderstandablysurprisingandfrustratingforpatients.Hospital-basedcareisdeliveredandbilledforunderadifferentmodelthanmostconsumerservices.Imaginegoingouttoeatandreceivingunexpectedbillsfromthehost,waiter,cook,anddishwasher,someofwhomwerewillingtonegotiatediscountsoracceptcoupons,whileotherswerenot.Thisisessentiallywhathappensatahospital.Eventhoughthecareisprovidedunderoneroof,theinsurancenetworkarrangementsandbillingareseparateformanyservices.

Non-emergencycareatin-networkfacilitiesPatientscanalsogetout-of-networkcareinnon-emergenciesthatisunanticipatedandunavoidable.Eventhemostdiligentpatientswhodotheirresearchandaskalloftherightquestionssometimegetsurprisemedicalbills.Inthesecases,surprisebillsoftencomefromprovidersthatpatientsdonotgettochoose,likeanesthesiologistsandradiologists,orfromprovidersthatpatientsdonotevenknowwillbeinvolvedintheircare,likeassistantsurgeons.Often,evenapatient’sattendingphysiciandoesnotknowinadvanceandhasnorealchoiceoverwhichfacility-basedphysicianswillassistwithaprocedure.

Forexample,priortoacolonoscopy,apatientmaybeabletoconfirmthathergastroenterologistisin-network,aswellasthesurgicalcenterwheretheprocedurewilltakeplace.Butevenwhentheyinquireaboutwhoelsewillprovidecare,patientsoftencannotgetspecificinformationonwhichanesthesiologistorpathologistmaybeinvolvedinaprocedure.Mediareportsshowmanyexamplesofsurprisebillscomingfromnon-emergencyhealthcarewhereout-of-networkserviceswereunanticipatedandunavoidable,includingcarefromassistantsurgeons,anesthesiologists,technicianswhodelivernewbornhearingscreenings,consultingpediatricians,neonatologists,painspecialists,pathologistsandlabs,doctorsinanintensivecareunit,andsurgeons.

SurpriseBillMediationinTexasNoonethinkssurprisebillsstemmingfromunexpectedout-of-networkcarearefairtopatients,includingtheTexasLegislature.TheTexasLegislaturecreatedamediationprogramforsurprisemedicalbillsforpatientswithPreferredProviderOrganization(PPO)plans,themostcommontypeofprivateinsurance.iMediationisamisnomer,becauseactualmediationisalmostneverused.WhattheLegislaturedidinpracticewastosimplyrequiredoctorsandinsurerstopickupthephoneandtrytoagreeonafairpriceinsteadofpushingthedisputedchargesoffontothepatient.

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WhenTexansusethesystem,itworks—doctorsandinsurersalmostalwaysclearupthepricingdisputeduringtheinformalphonecallthattakesplacebeforemediationisscheduled.Todate,92percentofallmediationrequestsaresettledthroughasimplephonecallbetweentheinsureranddoctor.iiOnlyeightpercentofrequestshavebeenreferredtotheStateOfficeofAdministrativeHearingsformediation,andevensomeofthosedisputesarelikelyresolvedbeforemediationoccurs.

ThebigproblemwithTexas’mediationsystemisthatrelativelyfewpatientsbenefitfromit.Unnecessarybarrierslimitpatients’accesstomediation.Sincetheprogramlaunchedin2009,ithasbeenusedbyonly3,824patients.iiiBasedontheavailabledata,weestimatethatabout250,000Texanswhohaveamediation-eligiblehealthplangetasurprise,out-of-networkmedicalbilloveratwo-yearperiod(seeMethodologysection).ivInotherwords,the3,824Texanswho’vebeenhelpedbymediationamounttoasmallfractionofalltheTexanswhocouldbehelpediftheLegislatureaddressedthebarrierstomediationdescribedbelow.

About250,000Texanswithamediation-eligiblehealthplangetasurprise,out-of-networkbillinatwoyearperiod.Onlyasmallfractionhavemanagedtoaccessmediation.

BarriersLimitAccesstoMediationItsoundseasyenough—patientswho’vereceivedaneligiblesurprisebillcanapplyformediation.Butthisoversimplificationmasksmanyunacknowledgedstepspatientsmusttakeandawarenesspatientsmustpossessbeforetheycanfileformediation.Together,theseprecursorstomediationcreateavirtualobstaclecoursethatsignificantlylimitsaccess.Thehurdlespatientsmustclearfallintothefollowingfivecategories,discussedindetailbelow:

• Decodingcomplexmedicalbills

• Knowingmediationrightsexist,andunderstandingthem

• Determiningifyourhealthplaniseligible

• Determiningifyourbillavoidsloopholes

• ApplyingformediationwiththeTexasDepartmentofInsurance

Thesepresentburdensforthemostsavvyconsumer,butcreateeventougherbarriersforpatientsjustdischargedfromthehospitalorrecoveringfrommedicalemergencies.Patientswhohavehadstrokesorheartattacks,forexample,oftenhaveongoing,healthchallengesthatwilllimittheircapacitytodecodemedicalbillsandnavigatecomplexsystems.Theyalsooftengetadelugeofmedicalbills,notjustoneortwo,makingthetaskofanalyzingbillsandidentifyingeligiblesurprisebillsoverwhelming.

Thegoodnewsisthatthereisafix.Otherstateshavesystemstoresolvesurprisebillsandhelpinsurersanddoctorsreachfairpricesthatdonotplaceburdensonpatients.ThesesolutionsarediscussedinlaterintheRecommendationssection.

DecodingmedicalbillsOneofthebiggestbarrierstomediationisthatpatientsmustdecodetheirmedicalbillsasafirststep.Balancebillsdonotcomeclearlylabeledassuch.Patientsmustbeabletogleanfromamedicalbillandtheseparatepaymentstatementfromtheinsurer(calledanExplanationofBenefits,orEOB)whethercarewasprovided

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out-of-network,whatportionisbeingcoveredbyinsurance,whatthepatientowesforcost-sharinglikedeductiblesandcopayments,andwhetherthepatientisbeing“balancebilled”foradditionalamountsthatexceedtherequiredcost-sharing.Anyonewhohastriedtodothisknowsthatitischallengingandrequiresfluencywithbothmedicalbillingandinsurancebenefits.

Figuringoutwhetheramedicalbilliseligibleformediationischallenging.Itrequiresfluencywithbothmedicalbillingandinsurancebenefits.

Patientsfindthewholemedicalbillingsystemconfusingandfrustrating.MedicalbillsandEOBsarenotoriouslyindecipherableandfullofjargon.Theyarriveseparately,possiblymonthsapart,andareoftenhardtoreconcile.ThesedocumentsareconfoundingforsomanypatientsthatAARPrecentlyteamedupwiththeU.S.DepartmentofHealthandHumanServicestosponsora“designandinnovationchallenge”tobuildanunderstandablemedicalbill.

KnowingaboutandunderstandingmediationrightsAnotherofthebiggestbarrierstomediationislackofawarenessbypatientsthatitevenexists.Statestatuterequireshospital-baseddoctor’sbillstoincludeamediationnotice.InsurerEOBsarerequiredonlytogenerallywarnaboutpossiblebalancebillingandprovideTDI’sphonenumber.vBasedontheverylimiteduseofmediationbypatients,itisclearthatthesedisclosuresdonotwork.

Thecurrentdisclosuresarelikelyineffectivebecausetheyaretackedontodocumentsthatconsumersfind,atbest,confusingand,atworst,indecipherable.ConsumersstruggletounderstandeventhemostbasicinformationonmedicalbillsandEOBs–howmuchtheyoweandwhatinsuranceisgoingtopay.Consumerswhogetconfusedorfrustratedjusttryingtodeterminewhattheyowemaynotkeepreadingdowntothefineprintthatcontainsamediationnotice.Oriftheygettothenotice,butarealreadyconfusedoroverwhelmedbytheinformationonthebill/EOB,theymaynotbeabletounderstandandactontheinformationinthemediationnotice.

Thisbarrierhasbigimplicationsforimprovingaccesstomediation.IfconsumerscannoteasilyunderstandandactonanoticetackedontoamedicalbillorEOBbecausethosedocumentsthemselvesaresoconfusingandoverwhelming,simplymakingthemediation-relatednoticewithinthesedocumentsmoreprominent(biggertext,differentplacement,differentcolor,etc.)maynothavetheeffectofbetterinformingconsumers.Ifsomeoneisspeakingaforeignlanguagethatyoudon’tknow,itdoesn’tbecomemoreunderstandableiftheyshout.

Currentmediationnoticesarenotworking.Simplymakingthemmoreprominentmaynothelpmuch.Ifsomeoneisspeakingaforeignlanguagethatyoudon’tknow,

itdoesn’tbecomemoreunderstandableiftheyshout.

Thewordingofexistingnoticesmayalsomakedisclosureineffective.Ifcurrentdisclosuresusetermsofartlike“balancebill”and“mediation,”patientsmaynotunderstandthenoticeorhowmediationwouldbenefitthem.viStandardizedandsimplenoticelanguagethathasnojargonortermsofartcouldhelpincreaseawarenessandunderstandingofmediation.

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DeterminingifyourplaniseligibleOnlypeoplecoveredbycertaintypesofinsurancecanaccessmediation—fullyinsuredpreferredproviderorganization(PPO)plansandcoveragethroughtheEmployeesRetirementSystemofTexas(ERS)HealthSelectplan.Together,about3.6millionTexashavethesetypesofplans.Manymorepeoplearecoveredbyplansthatarenoteligibleformediation,whichincludeself-fundedERISAplans,indemnityplans,HMOs,Medicare,andMedicaid.viiSeveralofthesedistinctionsbetweeninsuranceplansarehighlytechnicalandnotunderstoodbytheaverageconsumer.Theaverageconsumerwouldbeunlikelytoknow,forexample,whethertheirplanisfullyinsuredorself-funded(seetheMethodologysectionforanexplanationoftheseterms).

AvoidingloopholesOnlycertainsurprisebillsareeligibleformediationinTexastodaybecauseofmanyloopholesinourstatelaw.TheTexasLegislatureshouldclosealloftheloopholesinmediationtoensurethatpatientshaveprotectionfromsurprisebillsafteranemergencyortreatmentatanin-networkfacility,withnoexceptions.ThefollowingareexamplesofloopholesthatlockoutTexaspatientstoday:

• OnlycertainERscount.Today,asurprisebilliseligibleformediationonlyifcarewasprovidedatanin-networkhospital.Patientsarelockedoutofmediation,eveniftheclosestemergencyroomwasinanout-of-networkhospitalorafree-standingER.Thereareabout300free-standingemergencyroomsinTexaswherepatientsgetnosurprisebillingprotections.viiiAllpatientswho’vehadanemergencyshouldhaveaccesstomediation,regardlessofwhichERtheygoto.

• Onlycertainproviderscount.Patientscan’tchallengesurprisebillsfromambulances,hospitalsandotherfacilities,hospitalists,andmanyothertypesofprovidersfromwhompatientscanunknowinglygetout-of-networkcare.Today,asurprisebillisonlyeligibleformediationifitisfromaradiologist,anesthesiologist,pathologist,emergencydepartmentphysician,neonatologist,orassistantsurgeon.

• Onlycertainamountscount.Texasimposesanarbitrarydollarcut-offonmedicalbillsthatcangotomediation.Patientsarelockedoutiftheirbillislessthan$500,eveniftheyreceiveseveralsurprisemedicalbillsthatadduptomuchmorethan$500.Evenunexpectedbillsunder$500canthreatenafamily’sfinancialsecurity.TheU.S.FederalReservefoundthat46percentofU.S.adultscannotreadilycoveranemergencyexpenseof$400.ix

• Onlycertainpublicemployerinsuranceplanscount.StateemployeescoveredthroughtheEmployeeRetireeSystemofTexascangotomediation;howeverpublicemployeescoveredundersimilarplansauthorizedunderstatelawareineligible.ThelegislatureshouldextendmediationprotectionstoTexaspublicemployeescoveredthroughtheTeacherRetirementSystem,theUniversityofTexasSystem,andtheTexasA&MSystem.

NearlyhalfofU.S.adultsareunableorill-preparedtocover$400inemergencyexpenses.Currentlawcontainsanarbitrarycut-offthatletspatientmediateonly

surprisebillsthattop$500.

ApplyingformediationthroughtheTexasDepartmentofInsuranceTheactionsmostpatientstakewhentheygetasurprisebillareunlikelytohelpthemlearnaboutandrequestmediation.AConsumerReportssurveyofTexanswithprivateinsurancefoundthat,ofrespondentswhohad

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receivedsurprisemedicalbillsandtriedtoresolvethem,58percentcalledthedoctor’sofficeand44percentcalledtheirinsurer(consumerscouldreporttakingmultipleactions).xUndercurrentlaw,patientscannotrequestmediationthroughcallstotheirhealthplanordoctor.Theyprobablywon’tevenbetoldthatmediationexistsduringthesecalls.

PatientscanonlyrequestmediationthroughTDI.(ThemediationrequestformisavailableinEnglishandSpanishonTDI’swebsiteandcanbemaileduponrequestthroughTDI’stoll-freenumber.)Unfortunately,publicknowledgeabouttheagencyappearslow.OnlyonepercentofsurveyedTexansreportedcontactingastateagencyaftergettingasurprisebillandonly11percentreportedknowingwhichstateagencyinTexashandlescomplaintsrelatedtohealthinsurance.xi

Patientsgenerallycalltheirinsurerand/ordoctoraftergettingasurprisebill,butundercurrentlaw,cannotrequestmediationonthesecalls.Patientscanonly

requestmediationthroughtheTexasDepartmentofInsurance.Publicawarenessoftheagencyislow.

Otherstatesthathavesetupadisputeresolutionsystemforsurprisebillsdonotrequirethepatienttorequestornavigatemediation.Itisunnecessaryandburdensometomakepatientsnavigateacomplexsystemandsubmitpaperworksimplytogetadoctorandinsurerwithabillingdisputetopickupthephoneandtrytoworkitout.Inotherstates,doctorsandinsurerscandirectlyaccessdisputeresolutionandsettlemattersthemselves.

SurpriseBillingIsCommonA2015surveyfromConsumerReportsfoundthat1in14privatelyinsuredadultTexans(orsevenpercent)reportedgettingasurprise,out-of-networkbillinthelasttwoyears.xiiAseparatenationallyrepresentativesurveyfromtheCommonwealthFundin2016foundthat21percentofnon-elderlyadultshave,atsometime,receivedasurprise,out-of-networkbill.xiiiThefirstsurveyasksjustaboutsurprisebillsreceivedinthelasttwoyears,whilethesecondsurveyasksaboutsurprisebillsreceivedever,whichmayaccountforthedifferenceintheirfindings.Despitetheslightdifferenceinwhattheymeasure,bothsurveysshowthatsurprise,out-of-networkbillingiscommonandaffectsasignificantshareofpatientswithprivateinsurance.

ArecentreportonsurprisemedicalbillsfromtheBrookingsInstitutionandUSCSchaefferCenterconcludedthat:

Thereisnoseriousdisputeamongobserversorstakeholdersthatsurprisemedicalbillinghappenstoasignificantextent.Therearenumerouscasereportsinacademicliterature,widespreadmediaaccounts,andothercrediblesources,suchastheNewYorkTimes,theWallStreetJournal,TimemagazineandConsumersUnion.Inaddition,anumberofresearchstudiesmoresystematicallydocumentthedimensionsofthisproblem.xiv

UnanticipatedOut-of-NetworkCareisCommonInTexasInTexas,wehavemoredatapubliclyavailableontheout-of-networkbillingbyhospital-basedphysiciansthaninmost,ifnotall,otherstates.TexasDepartmentofInsuranceregulationsrequireinsurerswithPPOplanstoposttwokeypiecesofdataontheirwebsitesforeachin-networkhospital:

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1. thepercentageofdollarsbilledasout-of-networkbyanesthesiologists,emergencyroomphysicians,neonatologists,pathologists,andradiologists;and

2. whetherthehospitalishasnoin-networkprovidersforanesthesiology,emergencydepartment,neonatology,pathology,andradiologyservices.xv

Unlikethesurveyresultsabove,thesetwodatapointsdonotdirectlymeasurehowoftenpatientsgetsurprisemedicalbills.Theydo,however,illustratethelikelihoodofapatientreceivingout-of-networkserviceswithinanin-networkhospital,leavingthepatientvulnerabletoasurprisebill.CPPPfirstpulledthesedatafrominsurerwebsitesandanalyzedthemina2014report.WepulleddatafromthewebsitesofthreeofTexas’largestinsurers—BlueCrossBlueShieldofTexas,UnitedHealthcare,andHumana—againin2016toprovidetheupdatedandexpandedsnapshotbelow(seetheMethodologysectionformoreinformation).

KeyFindings• Texaspatientsareroutinelytreatedbyout-of-networkdoctorsatin-networkhospitalERs,likely

makingsurpriseemergencymedicalbillscommon.Emergencyroomphysiciansatin-networkhospitalsbillasignificantportionoftheirservicesout-of-network,rangingfrom42percentto70percentofdollarsbilledout-of-network,onaverage,acrossthethreeinsurersasshowninTable1.

• Astaggeringshareofin-networkhospitalsdonothaveevenasinglein-networkemergencyroomphysicianavailable,guaranteeingthatallemergencytreatmentwillbeperformedbyout-of-networkdoctors.Theshareofin-networkhospitalswithnoin-networkemergencyroomphysiciansrangedfrom18to63percent,asshowninTable1.Therearemorethan300hospitalsinTexaswherethehospitalitselfisin-network,butthereisnotasinglein-networkERdoctoravailablewithatleastoneofthethreeinsurersinthisstudy(seeFigure1).

• Ofthefivehospital-basedprovidertypesforwhichinsurersmustreportPPOout-of-networkservicedata—anesthesiologists,emergencyroomphysicians,neonatologists,pathologists,andradiologists—patientsappearmuchmorelikelytogetsurprise,out-of-networkbillsfromemergencyroomphysicians.Acrossallthreeinsurersinthestudy,theshareofout-of-networkbillingbyERphysicianswasatleast2.5timesgreaterthanthesharesbytheotherhospital-basedphysiciantypes.Theshareofout-of-networkbillingatin-networkhospitalsbydifferenthospital-basedphysiciantypesisshowninFigure2.In-networkhospitalsarealsomorelikelytoentirelylackanyin-networkemergencyroomphysicianscomparedtotheotherhospital-basedphysiciantypes,asshowninFigure3.

• TherearesomehospitalERsinTexaswheresurprisebillingappearsrare.The23hospitalsinTable2arein-networkwithallthreeinsurersinthestudy,andhadlessthan10percentofERphysicianchargesbilledasout-of-network.Fourofthehospitalsinthestate—hospitalsinFriona,Spearman,Stamford,andWellington—arein-networkwithallthreeinsurersinthestudyandforeachinsurerhave100percentofERphysicianservicesbilledin-network.Inotherwords,thereareonlyfour“no-surpriseERs”inthestate,atleastforthethreeinsurersexaminedinthisstudy.

• TherearemorehospitalERswheresurprisebillingappearstobeavirtualguarantee.The40hospitalsinTable3arein-networkwithallthreeoftheinsurersinthestudy,but95percentormoreofthedollarsbilledbyemergencyphysiciansatthehospitalareout-of-networkforallthreeinsurers.Inotherwords,alargeshareofpatientswithPPOswhousetheERsinthehospitalslistedinTable3were,duringthetimeperiodsreflectedbythedata,almostcertaintobetreatedbyout-of-networkERphysicians,andasaresult,vulnerabletoasurprisemedicalbill.

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CPPPanalysisofdatapostedonlinebyBlueCrossBlueShieldofTexas,UnitedHealthcare,andHumana.Timeframesvarybyinsurer,seeMethodologyforsourcedetail.Datareflectbillingandprovidersassociatedonlywithin-networkhospitalsthatofferemergencyroomservices,asindicatedbyinsurers.Averageshareofout-of-networkbillingcalculatedasthemeanpercentageofdollarsbilledout-of-networkbyeachin-networkhospital.

SurpriseBillingisWorseinTexasTworecentnationalreportsshowthatsurprisebillsstemmingfromemergencymedicalcarearemorecommoninTexasthanmostotherstates.OnestudypublishedinHealthAffairs,foundthatnationally,20percentofpatientsadmittedtoahospitalthroughtheemergencyroomwerelikelytogetasurprisemedicalbill.xviInTexas,theratewasmuchhigherat34percent.Texasisoneofonlyfivestateswithratesatorabove30percent(theotherswereAlaska,Florida,NewJersey,andNewYork).TexasalsofaredpoorlywhenlookingatthelikelihoodofasurprisebillfollowinganoutpatientERtrip(asopposedtoonethatledtoahospitaladmission).Nationally,14percentofoutpatientERvisitswerelikelytoresultinasurprisebill,whileinTexas,itwas27percent.Texasisoneofjust4stateswheretheratewas20percentofhigher(theotherstateswereAlaska,Florida,andNewYork).AseparatestudypublishedintheNewEnglandJournalofMedicinefoundthatnationally,22percentofemergencyroomvisitsinvolvecarebyadoctorwhoisout-of-network,puttingthepatientatriskofasurprisemedicalbill.xviiInmuchofTexas,theproblemisworse.ThestudyhighlightsMcAllen,Texasandthesurroundingareaasoneoftheworstinthenationwith89percentoremergencyroomvisitslikelytoresultinasurprisebill.

WhatOtherStatesAreDoingTexasmayhaveledthewayasthefirststatetoputadisputeresolutionsysteminplaceforpatientswithsurprisebillsin2009.Sincethen,severalstateshavebuiltuponandexpandedtheuseofdisputeresolutionbetweeninsurersandout-of-networkdoctorsinwaysthatbetterprotectpatients.Mostnotably,agrowingnumberofstateshavecreatedcomprehensiveandpatient-centeredsystemswithstrongbipartisansupportto

Table1:Out-of-networkEmergencyRoomPhysicianServicesatIn-networkHospitals

Insurer

ShareofSurprise,Out-of-NetworkERBilling

Averagepercentageofdollarsforemergencyroomphysicianservicesbilledout-of-networkatin-network

hospitals

ShareofHospitalswithGuaranteedSurprise,

Out-of-NetworkERCarePercentageofin-networkhospitalswithnoin-networkemergency

roomphysicians

BlueCrossBlueShield 42% 18%

Humana 51% 63%

UnitedHealthcare 70% 40%

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addresssurprisebillswithoutplacingburdensonpatients,includingFlorida,California,NewYork,andIllinois.LawsineachofthesefourstatessharekeyfeaturesthatTexasstilllacks:

• Patientsareresponsibleforexpectedcosts,withnosurprises.Whenpatientsgotoin-networkhospitalsbutareunknowinglytreatedbyout-of-networkdoctors,patientsareonlyresponsiblefortheirdeductiblesandcopayments,asifthecarehadbeenin-network.Patientsarenotsubjecttoadditionalsurpriseout-of-networkfees.

• Patientsarenolonger“caughtinthemiddle”ofbillingfights.Whenout-of-networkdoctorsorothermedicalprovidersandinsurerscan’tagreeonafairprice,thetwopartiescandirectlyaccessdisputeresolutiontosortouttheproblem.Patientsdonothavetoknowaboutandapplyforhelpfordisputeresolutionbetweentheproviderandinsurertooccur.

RecommendationsCommitteesofjurisdictioninboththeTexasHouseandSenatestudiedsurprisebillingandTexas’mediationsysteminthe2016interim,signalingtheirrecognitionoftheneedformoreworkonthisissue.Attheendof2016,boththeSenateBusinessandCommerceCommitteeandtheTexasDepartmentofInsurancerecommendedexpansionofTexas’mediationsystem,makingprospectsgoodforadditionalimprovementsduringthe2017session.xviiiTexashasagoodfoundationinplacewithitsexistingmediationsystem,butchangesareneededtoensurethatpatientscanreliablyaccessthehelpintendedbythelegislature.Therearemanywaysthe2017Legislaturecantakeincremental,yetmeaningful,stepstoimprovepatients’accesstomediationbyreducingthebarriersoutlinedinthisreport.Ultimately,thebestandmostcompletesolutionforpatientsthatbuildsoffofourexistingsurprisebillmediationsystemwouldincorporatethefollowingprinciples:

The2017Legislaturecantakeincremental,yetmeaningful,stepstoimproveaccesstomediationbyreducingthebarrierspatientsface.

Protectpatientsfromsurprisebillsiftheydidnotchooseorcouldnotavoidout-of-networkcare.Inemergenciesandwhenpatientsreceivecareatanin-networkfacilitybuthavenoabilitytochooseanin-networkphysician,surprisebillingshouldbeprohibited.Patientsarealreadyresponsiblefortheirexpectedpremiums,deductibles,andcopayments.Theyshouldnotbesubjecttosurprisebillsbeyondthoseamountswhentheyunknowinglyreceivecareoutofnetwork.

Ensureprovidersandinsurershaveatrustedsystemthroughwhichtheydirectlysettleout-of-networkpaymentdisputes.Insteadofoffloadingbillingdisputesontopatientsthroughsurprisebills,insurersandprovidersshouldsettletheirdisputesdirectlyusingTexas’mediationsystem.Providersand/orinsurersshouldinitiatemediation,notpatients.

Closetheloopholes.Allsurprisebillsstemmingfromamedicalemergencyortreatmentfromanout-of-networkprovideratanin-networkfacilityshouldbeeligibleformediationwithnoloopholes.

• Allprovidersofemergencycare,includingfacilitieslikehospitalsandfree-standingERsshouldbesubjecttomediation.

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• Allphysicianspracticingatin-networkfacilities,regardlessoftheirspecialty,shouldbesubjecttomediation,unlesstheyprovideanaccuratebillingestimateandgetinformedconsenttoprovideout-of-networkservices24hoursinadvanceoftreatment.

• Noarbitrarydollaramounts.Removethebarrierthatallowsmediationonlyforsurprisebillsthattop$500.

• Equalaccessforpublicemployeeplans.PublicemployeescoveredundertheTeacherRetirementSystemofTexas(TRS),andUTandA&MsystemhealthcoverageshouldhavethesameaccesstomediationasstateemployeeswithcoveragethroughEmployeeRetirementSystemofTexas(ERS).

Figure1:ERsstatewidewithnoin-networkERphysicians,foratleastonemajorinsurer

CPPPanalysisofdatapostedonlinebyBlueCrossBlueShieldofTexas,UnitedHealthcare,andHumana.Timeframesvarybyinsurer;seeMethodologyforthisandothersourcedetail.Dataareforprovidersatin-networkhospitalsthatofferemergencyroomservices,asreportedbyinsurers.

In-networkhospitalsthatdonothaveasinglein-networkERdoctorwithatleastoneofthreeofTexas’largestinsurers.Numbersindicatetheamountofsuchhospitalsinanarea.

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Figure2:Out-of-networkERPhysicianServicesAreCommonatIn-networkHospitals

AveragePercentageofDollarsBilledOut-of-NetworkatIn-NetworkHospitalsbyPhysicianSpecialty

CPPPanalysisofdatapostedonlinebyBlueCrossBlueShieldofTexas,UnitedHealthcare,andHumana.Timeframesvarybyinsurer;seeMethodologyforsourcedetail.Datareflectbillingassociatedonlywithin-networkhospitalsthatoffertherelevantcategoryofhospital-basedservice,asreportedbyinsurers.

Figure3:ManyIn-networkERsHaveNoIn-networkPhysiciansAvailablePercentageofIn-networkHospitalswithNoIn-networkProviderTypebyPhysicianSpecialty

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CPPPanalysisofdatapostedonlinebyBlueCrossBlueShieldofTexas,UnitedHealthcare,andHumana.Timeframesvarybyinsurer;seeMethodologyforsourcedetail.Datareflectprovidersassociatedonlywithin-networkhospitalsthatoffertherelevantcategoryofhospital-basedservice,asreportedbyinsurers.

Table2:TexasHospitalsWhereSurpriseEmergencyBillingAppearsRare(LowPercentageofOut-of-networkERDoctorBilling)

Hospitalslistedarein-networkwithallthreeinsurersinthestudy,andforeachinsurerhas10percentorlessofERphysicianservicesbilledout-of-network.Thefourhospitalswithanasterisk(*)have0percentofER

physicianbillingout-of-networkforallthreeinsurers.

HospitalName City

BAPTISTSTANTHONY’SHOSPITAL AMARILLO

DELSOLMEDICALCENTERACAMPUSOFLPDSHEALTHCARE ELPASO

TEXASHEALTHPRESBYTERIANHOSPITALFLOWERMOUND FLOWERMOUND

COOKCHILDRENSMEDICALCENTER FORTWORTH

*PARMERMEDICALCENTER FRIONA

LAKEGRANBURYMEDICALCENTER GRANBURY

MEMORIALHERMANNMEMORIALCITYMEDICALCENTER HOUSTON

CHRISTUSMOTHERFRANCESHOSPITAL-JACKSONVILLE JACKSONVILLE

COVENANTMEDICALCENTER-LAKESIDE LUBBOCK

MULESHOEAREAMEDICALCENTER MULESHOE

SHANNONWESTTEXASMEMORIALHOSPITAL SANANGELO

BAPTISTMEDICALCENTER SANANTONIO

METHODISTHOSPITAL SANANTONIO

METHODISTSTONEOAKHOSPITAL SANANTONIO

MISSIONTRAILBAPTISTHOSPITAL SANANTONIO

NORTHCENTRALBAPTISTHOSPITAL SANANTONIO

NORTHEASTBAPTISTHOSPITAL SANANTONIO

STLUKE’SBAPTISTHOSPITAL SANANTONIO

*HANSFORDCOUNTYHOSPITAL SPEARMAN

*STAMFORDMEMORIALHOSPITAL STAMFORD

MEMORIALHERMANNSUGARLAND SUGARLAND

*COLLINGSWORTHGENERALHOSPITAL WELLINGTON

CHRISTUSMOTHERFRANCESHOSPITAL-WINNSBORO WINNSBOROCPPPanalysisofdatapostedonlinebyBlueCrossBlueShieldofTexas,UnitedHealthcare,andHumana.Timeframesvarybyinsurer;seeMethodologyforsourcedetail.Datareflectbillingassociatedonlywithin-networkhospitalsthatofferemergencyroomservices,asreportedbyinsurers.

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Table3:HospitalsWhereSurpriseEmergencyBillingAppearsNearlyGuaranteed(PercentageofOut-of-networkERDoctorBillingof95%orMore)

Hospitalslistedarein-networkwithallthreeinsurersinthestudy,andforeachinsurerhas95percentormoreofERphysicianservicesbilledout-of-network.

HospitalName CityABILENEREGIONALMEDICALCENTER ABILENEMETHODISTHOSPITALFORSURGERY ADDISONBIGBENDREGIONALMEDICALCENTER ALPINECAREREGIONALMEDICALCENTER ARANSASPASSVALLEYREGIONALMEDICALCENTER BROWNSVILLEBROWNWOODREGIONALMEDICALCENTER BROWNWOODTEXASHEALTHHUGULEYHOSPITAL BURLESONCOLLEGESTATIONMEDICALCENTER COLLEGESTATIONTHECORPUSCHRISTIMEDICALCENTER-BAYAREA CORPUSCHRISTIBAYLORSCOTT&WHITEMEDICALCENTER-WHITEROCK DALLASDALLASMEDICALCENTER DALLASMETHODISTDALLASMEDICALCENTER DALLASWISEHEALTHSYSTEM DECATURVALVERDEREGIONALMEDICALCENTER DELRIOFORTDUNCANREGIONALMEDICALCENTER EAGLEPASSENNISREGIONALMEDICALCENTER ENNISHILLCOUNTRYMEMORIALHOSPITAL FREDERICKSBURGGLENROSEMEDICALCENTER GLENROSEHARLINGENMEDICALCENTER HARLINGENSTJOSEPHMEDICALCENTER HOUSTONBAYLORMEDICALCENTER-IRVING IRVINGSOUTHTEXASREGIONALMEDICALCENTER JOURDANTONLAREDOMEDICALCENTER LAREDOMEMORIALMEDICALCENTEROFEASTTEXAS LUFKINRIOGRANDEREGIONALHOSPITAL MCALLENDALLASREGIONALMEDICALCENTER MESQUITEMIDLANDMEMORIALHOSPITAL MIDLANDHOUSTONMETHODISTSTJOHNHOSPITAL NASSAUBAYMEDICALCENTERHOSPITAL ODESSABAPTISTORANGEHOSPITAL ORANGEPAMPAREGIONALMEDICALCENTER PAMPATHEMEDICALCENTEROFSOUTHEASTTEXAS PORTARTHUROAKBENDMEDICALCENTER RICHMONDSTARRCOUNTYMEMORIALHOSPITAL RIOGRANDECITYSOUTHWESTGENERALHOSPITAL SANANTONIOHOUSTONMETHODISTSUGARLANDHOSPITAL SUGARLANDCHRISTUSST.MICHAELHEALTHSYSTEM TEXARKANATOMBALLREGIONALMEDICALCENTER TOMBALLCITIZENSMEDICALCENTER VICTORIAWEATHERFORDREGIONALMEDICALCENTER WEATHERFORD

CPPPanalysisofdatapostedonlinebyBlueCrossBlueShieldofTexas,UnitedHealthcare,andHumana.Timeframesvarybyinsurer;seeMethodologyforsourcedetail.Datareflectbillingassociatedonlywithin-networkhospitalsthatofferemergencyroomservices,asreportedbyinsurers.

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MethodologyTexansenrolledinmediation-eligiblehealthplans

AccordingtotheU.S.CensusBureau,morethan16millionTexanshaveprivatehealthinsurance(i.e.,notMedicaid,CHIPorMedicare).xixMostTexanswithprivatehealthinsurancehave“self-fundedERISA”plans.Theseplansareregulatedatthefederallevel,andgenerally,stateconsumerprotectionlawslikesurprisebillingmediationdonotapplytotheseplans.TheTexasLegislatureandTexasDepartmentofInsurancehavepurviewover“fullyinsured”plansthatcoverasmallershareofthepopulation.TheTexasDepartmentofInsuranceestimatesthatabouttwo-thirdsofTexanswithprivateinsurancehaveself-fundedcoverageandone-thirdhavefully-insuredcoverage.xx

TheonlyhealthplantypesthatareeligibleformediationarefullyinsuredPPOsandtheself-fundedEmployeeRetirementSystemofTexas(ERS)HealthSelectplan.Self-fundedplans(otherthanERSHealthSelect),MedicareandMedicaidarenotsubjecttoTexas’surprisebillingmediation.

TheTexasAssociationofHealthPlans’December2015surveyofhealthplansfoundthattherewereapproximately4,489,000TexansinfullyinsuredplansasofJuly2015,andofthose,70.7percentareinPPOs(about3,174,000people).xxiUsingthesenumbersfromTAHPproducesamoreconservative(i.e.lower)roughestimateofthepotentialscopeofbalancebillsthatcouldbemediation-eligible,because(1)TAHP’senrollmentsurveydoesnotincludeinsurersthathavesmallermarketshares(thesurveyexcludedinsurerswithbetween2and4percentofcommercialenrollees),and(2)TAHP’scountof4.5millionTexansinthefullyinsuredmarketislowerthantheTexasDepartmentofInsurance’sroughestimateof5.6millionTexanswiththesametypeofinsurance.

AsofAugust2015,therewere436,000stateemployeesanddependentsenrolledintheself-fundedHealthSelectplanadministeredbyERS,whichisalsosubjecttomediation.xxii

Together,thereareabout3.6millionTexansenrolledinplansthataresubjecttomediation,eitherinfullyinsuredPPOs(3,174,000people),orinERS’HealthSelectplan(436,000people).

Shareofinsuredconsumerswhoreceivesurprisemedicalbills

Twonationalsurveysprovideinformationonthefrequencyofsurprisebalancebilling.

ConsumerReportsNationalResearchCenterconductedanonlinesurveyaboutsurprisemedicalbillsinMarch2015.xxiiiCRNRCsurveyedanationallyrepresentativesampleofadultswithprivateinsuranceplansandalsosurveyedadditionalconsumersinfourstates,includingTexas,producingTexas-specificdata.Texasandnationaldatawerestatisticallyweightedsothatsurveyrespondentsweredemographicallyandgeographicallyrepresentativeofthestateandnation.Thesurveyfoundthat,inthepriortwoyears,35%ofTexansreportedgettingamedicalbillwherethehealthplanpaidmuchlessthanexpectedornothing(ahigherratethanthenationalaverageandratesfromtheotherstates,Ohio,Florida,andCalifornia).Ofthe35%ofTexanswhoreportedbeingsurprisedbyhowlittlewascovered,20%ofthemreportedthattheywerechargedanout-of-networkratewhentheythoughttheproviderwasin-network(again,ahigherratethanthenationalaverageandtheratesfromtheotherstates).Inotherwords,thesurveyfoundthatinthelasttwoyears,7%ofTexansreceivedasurprisemedicalbillwheretheywerechargedanout-of-networkratewhentheythoughtthecaretheyreceivedwasin-network(comparedto4.2%nationally,4.6%inOhio,and4.1%inbothFloridaandCalifornia).

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AnationallyrepresentativesurveyfromtheCommonwealthFundin2016foundthat21%ofnon-elderlyadultshave,atsometime,receivedcareatahospitalthattheythoughtwasin-networkandlaterreceivedasurprisebillfromanout-of-networkphysicianworkingatthehospital.xxivThesurveyfoundthattherateforsurprisemedicalbillswassimilarregardlessofwhetherconsumershadjob-basedinsuranceorhadcoveragethroughtheHealthInsuranceMarketplace,despitetheprevalenceof“narrownetwork”plansintheMarketplace.Thestudyauthorsconcludedthat“theproliferationofnarrownetworkplansdoesnotappeartobecreatingmoreproblemswithso-calledsurprisemedicalbills.”

Bothsurveysprovideavaluablesnapshotofhowfrequentlyconsumersarefacedwithsurprisemedicalbills;however,theyaskslightlydifferentquestionsandmeasureslightlydifferentthings.ThedatawechosetousefromtheConsumerReportssurveyisTexas-specific,andtheCommonwealthFunddataisnot.TheConsumerReportssurveyasksconsumersonlyaboutsurprisemedicalbillsreceivedinthelasttwoyears,whiletheCommonwealthFundasksaboutsurprisebillseverreceived.Also,theCommonwealthFundmorenarrowlyasksaboutcarereceivedatahospitalbelievedtobein-network,andtheConsumerReportssurveyasksmorebroadlyaboutanysurpriseout-of-networkcare.

HowmanyTexansgetsurprisebillswhocouldusemediation(i.e.,theirinsurersaresubjecttostateregulation)?

Assumingthe7%ratefromtheTexassampleoftheConsumerReportssurveyholdsoverthe3.6millionTexanswithmediation-eligibleplans,we’dexpectthatinatwo-yearperiod,about250,000Texanswithmediation-eligibleinsuranceplanswouldreceiveasurprise,out-of-networkmedicalbillforcaretheythoughtwasin-network.

Assumingthe21%ratefromthenationalCommonwealthFundsurveyholdsoverthe3.6millionTexaswithmediation-eligibleplans,we’dexpectthat760,000Texanswithmediation-eligibleinsuranceplanswouldreporthavingeverreceivedasurprisebillfromanout-of-networkhospital-basedphysician.

RegardlessoftheexactnumberofTexanswhogetsurprisebills,bothoftheseback-of-the-envelopeestimatespointclearlytooneconclusion—todaymediationservesonlyatinyfractionofTexanswhogetsurprisebillsandcouldbehelpedbymediationiftheLegislaturefixestheprogram.

Texas’surprisemedicalbillmediationprogramwasimplementedinSeptember2009.AsDecember31,2016,about7yearsaftertheprogrambegan,TDIreportsthatmediationhasbeenusedbyonly3,824Texans.xxvItappearsasifthevastmajorityofTexaspatientswhogetsurprisemedicalbillsandwhocouldbehelpedthroughastate-levelmediationprogramfailtobenefitatall.

(Itisimportanttonotethatmanymorethan250,000Texansactuallygetsurprisemedicalbills,butmostofthemcouldnotbehelpedbyastate-levelmediationprogrambecausetheyhavefederallyregulatedself-insured(ERISA)plans.Altogether,morethan16millionTexanshaveprivatehealthinsurance.TheillustrationsabovelookonlyatthenumberofsurprisemedicalbillsthatmaybeexpectedinthemuchsmallerpopulationofTexans(3.6millionpeople)whohavefullyinsuredPPOplansandERS’HealthSelect,andthuscanbesubjecttomediationthroughstatelaw.)

Frequencyofunanticipatedout-of-networkhealthcareinTexas

CPPPpulleddatapostedbyinsurersontheirwebsitesinJune2016.CPPPattemptedtogetdatafromthefourlargestaccidentandhealthinsurersinTexas:BlueCrossBlueShieldofTexas,UnitedHealthcare,Aetna,andHumana;butultimatelywewereunabletogetcompleteandreliabledataforAetna.Theageofeachinsurer’sdatavaries,asdothetimeperiodscoveredbythedata.Herearethespecificsforeachplan:

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• BlueCrossBlueShieldofTexas:dataavailableatwww.bcbstx.com/onlinedirectory/hospital_based_physicians.htm.WeaccessedBCBS’sdatafortheBlueChoicePPOinJuly2016.ThedocumentspostedweredatedJuly2016andtheout-of-networktotaldollaramountsbilledreflectedthetimeperiodfromAugust1,2014throughJuly31,2015.

• UnitedHealthcare:dataavailableathttps://www.providerlookuponline.com/UHC/po7/pdfs/EPO_Texas_Hospital_English.pdf.WeaccessedUnited’sdatainJuly2016.ThedocumentspostedweredatedNovember2014.United’sposteddatadoesnotincludeatimeframefortheout-of-networkbillingamounts.

• Humana:dataavailableathttp://apps.humana.com/marketing/documents.asp?file=1870245.WeaccessedUnited’sdatainJuly2016.ThedocumentspostedweredatedApril2016andtheout-of-networktotaldollaramountsbilledreflectedthetimeperiodfromJanuary1,2015throughDecember31,2015.

• Aetna:partialdataavailableathttp://www.aetna.com/docfind/cms/assets/pdf/TX_NonContracted_Prvdr_Rprt.pdf.Aetnaidentifieswhichhospitalscompletelylackin-networkhospital-basedprovidertypesthroughitsonlineproviderlook-upsearchresults.Thismakestheinformationmoreavailabletoconsumers,butdoesnotallowforastatisticalanalysisoftheinformation.AetnawasunabletoprovideCPPPwiththedatainanalternateformat.Aetnapostsdataonout-of-networkbillingonline,butdoesnotincludedataforeachofthefiverequiredprovidertypesateachhospital.Datawereavailableforlessthanhalfofnetworkhospitalsforthreeprovidertypes.Wedeterminedthattheavailabledataappearedtooincompletetobereliable.AetnawasunabletoprovidecompletedatatoCPPP.

CPPP’sanalysisoftheaveragedollarsbilledout-of-networkandtheshareofhospitalswithoutanin-networkproviderbyprovidertypeconsideronlythehospitalsthatofferthoseservices,asreportedbyinsurers.Forexample,hospitalsthatdonotofferneonataologyaccordingtheinsurer’sdataarenotincludedinthecalculationofshareofhospitalswithoutanin-networkneonatologyprovider.Theaverageshareofout-of-networkbillingiscalculatedasthemeanpercentageofdollarsbilledout-of-networkateachnetworkhospitalofferingtherespectiveservice.

Westandardizedtheuseofhospitalnamesacrossinsurers,usingthenamesunderwhichhospitalswereregisteredwiththeDepartmentofStateHealthServicesasofJuly7,2016.xxvi

LearnmoreaboutSurpriseMedicalBilling:bit.ly/surprisemed

FormerCPPPinternDanielleKailingassistedwiththedataanalysisinthisreport.Formoreinformationortorequestaninterview,pleasecontactOliverBernsteinatbernstein@cppp.orgor512.823.2875.

ThankyoutotheAffordableCareActImplementationFundandtheFIRSTFundoftheAustinCommunityFoundationforsupportingourwork.

AboutCPPPTheCenterforPublicPolicyPrioritiesisanindependentpublicpolicyorganizationthatusesresearch,analysisandadvocacytopromotesolutionsthatenableTexansofallbackgroundstoreachtheirfullpotential.LearnmoreatCPPP.org.

Twitter:@CPPP_TX Facebook:Facebook.com/bettertexas

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iCreatedbyHouseBill2256in2009(R-Hancock)andexpandedbySenateBill481in2015(R-Hancock).iiTexasDepartmentofInsurance,dataonmediationrequestsreceivedfromSeptember1,2009throughDecember31,2016.iiiTexasDepartmentofInsurance,dataonmediationrequestsreceivedfromSeptember1,2009throughDecember31,2016.ivThetotalnumberofTexaspatientswhoreceiveasurprise,out-of-networkmedicalbillsissignificantlyhigherthan250,000intwoyears.Forthisreport,wearejustlookingatTexanswithplansthatareregulatedatthestate-levelandcanthereforebesubjecttoastatemediationprogram.TDIestimatesthataboutone-thirdofTexanswithprivateinsurancehavestate-regulatedplansandtwo-thirdshavefederallyregulatedself-fundedorERISAplans.AfederalsolutionisneededtoprotectthemuchlargernumberofTexaswithfederallyregulatedplanswhoaregettingsurprisemedicalbills.vTIC1456.004(c)andTIC1456.003.StateregulationsrequireaspecificmediationnoticeonlyonEOBsfromERS,28TAC§21.5020.viThemostspecificnoticerequirementinlawappliestohospital-basedphysicianandrequiresabalancebilltohave“aconspicuous,plain-languageexplanationofthemandatorymediationprocessavailableunderChapter1467.”NoticeshealthplansplaceonEOBsarenotrequiredtobeconspicuousorplainlanguage,andarenotrequiredtoinformpatientsaboutmediation.viiPeoplewithHMOs,Medicare,andMedicaidhaveseparateandstrongerprotectionsagainstbalancebillinginotherstateorfederallaws.FederalMedicaidstatutecurrentlyprohibitsbalancebillingforMedicaidenrolleeswhoare“fullbeneficiaries.”SeeCPPP’searliersurprisebillingreportforadiscussionofTexasHMOprotections.viiiCountoftotalfree-standingERsinTexasfromDepartmentofStateHealthServiceswrittentestimonytotheSenateBusinessandCommerceCommittee,May4,2016.ixBoardofGovernorsoftheFederalReserveSystem,ReportoftheEconomicWell-BeingofU.S.Householdsin2015,May2016,https://www.federalreserve.gov/2015-report-economic-well-being-us-households-201605.pdf.Thesurveyfoundthat46percentofU.S.adultscouldnotreadilycoveranemergencythatcost$400ortheywouldcoveritbysellingsomethingorborrowingmoney.xConsumerReportsNationalResearchCenter,SurpriseMedicalBillsSurvey,2015NationallyRepresentativeOnlineSurvey,May2015,http://consumersunion.org/wp-content/uploads/2015/05/CY-2015-SURPRISE-MEDICAL-BILLS-SURVEY-REPORT-PUBLIC.pdf.xiConsumerReportsNationalResearchCenter,SurpriseMedicalBillsSurvey.xiiConsumerReportsNationalResearchCenter,SurpriseMedicalBillsSurvey.xiiiM.Z.Gunja,S.R.Collins,M.M.Doty,andS.Beutel,Americans’ExperienceswithACAMarketplaceCoverage:AffordabilityandProviderNetworkSatisfaction,TheCommonwealthFund,July2016,http://www.commonwealthfund.org/publications/issue-briefs/2016/jul/affordability-and-network-satisfaction#/#9.xivM.A.Hall,P.B.Ginsburg,S.M.Lieberman,L.Adler,C.Brandt,andM.Darling,SolvingSurpriseMedicalBills,BrookingsInstitutionandUSCShafferCenter,October13,2016,https://www.brookings.edu/wp-content/uploads/2016/10/sbb1.pdf.xv28TAC3.3705(l)(2)and28TAC3.3705(l)(8)xviChristopherGarmonandBenjaminChartock,“OneInFiveInpatientEmergencyDepartmentCasesMayLeadToSurpriseBills,”HealthAffairs,2017Jan1;36(1):177-181.PublishedonlineDecember14,2016,http://content.healthaffairs.org/content/early/2016/12/13/hlthaff.2016.0970.abstract;andSabriyaRice,“Medicalbillingisanationalproblemthat'sevenabiggerheadacheinTexas,”DallasMorningNews,January20,2017,http://www.dallasnews.com/business/health-care/2017/01/20/medical-billing-surprise-bigger-texas.xviiZackCooperandFionaScottMorton,“Out-of-NetworkEmergency-PhysicianBills—AnUnwelcomeSurprise,”TheNewEnglandJournalofMedicine,November17,2016:375:1915-1918,textavailableviaNEJMCatalystathttp://catalyst.nejm.org/out-of-network-physicians-emergency-billing/;andMargotSanger-KatzandReedAbelson,“Surprise!InsurancePaidtheE.R.butNottheDoctor,”NewYorkTimes,November16,2016,https://www.nytimes.com/2016/11/17/upshot/first-comes-the-emergency-then-comes-the-surprise-out-of-network-bill.html.xviiiSenateCommitteeonBusinessandCommerce,Reporttothe85thLegislature,November2016,http://www.lrl.state.tx.us/scanned/interim/84/B963.pdf,andTexasDepartmentofInsurance,BiennialReporttothe85thLegislature,December2016,http://www.tdi.texas.gov/reports/documents/2016biennialreport.pdf.xixU.S.CensusBureau,2015AmericanCommunitySurvey,TablesforHealthInsuranceCoverageHI-05,September2016,http://www.census.gov/data/tables/time-series/demo/health-insurance/acs-hi.html.xxTexasDepartmentofInsurance,WrittenTestimonytotheSenateCommitteeonBusinessandCommerce,May4,2016.xxiTexasAssociationofHealthPlans,TrendsintheCommercialHealthInsuranceMarket2013-2015,http://tahp.org/wp-content/uploads/2016/11/TAHP-Resource-Guide-Trends-in-Commercial-Health-Coverage-April-2016.pdf.xxiiSunsetAdvisoryCommission,StaffReportontheEmployeeRetirementSystemofTexas,April2016,(HealthSelectenrollment,page19),https://www.sunset.texas.gov/public/uploads/files/reports/Employees%20Retirement%20System%20of%20Texas%20Staff%20Report_4-29-16_0.pdfxxiiiConsumerReportsNationalResearchCenter,SurpriseMedicalBillsSurvey.xxivM.Z.Gunja,S.R.Collins,M.M.Doty,andS.Beutel,Americans’ExperienceswithACAMarketplaceCoverage:AffordabilityandProviderNetworkSatisfaction.xxvTexasDepartmentofInsurance,dataonmediationrequestsreceivedfromSeptember1,2009throughDecember31,2016.xxviTexasDepartmentofStateHealthServices,DirectoryofGeneralandSpecialHospitals,datedJuly7,2016,https://www.dshs.texas.gov/facilities/find-a-licensee.aspx.