New legislation passed in the 2019 session of the Texas Legislature, SB 1264, went into effect on January 1, 2020. The statute protects Texas residents from so-called surprise billing, where patients receive costly medical bills for care provided by out-of-network providers, either in an emergency context or in a facility which itself is in-network.
SB 1264 attempts a balance between the competing interests of payors, providers and patients. On the one hand, payors are mandated to make payment to out-of-network providers for emergency care, or where care is provided by out-of-network providers who are based in a facility (and thus have little choice or discretion regarding which patients to accept). On the other hand, out-of-network providers are prohibited from billing patients for any amounts in excess of the patient's applicable out-of-network copayment, coinsurance and deductible, regardless of whether the payment received from a third-party payor covers all of the provider's billed charges.
SB 1264 and its rules do not apply to non-emergency services provided by out-of-network providers as long as the patient consents to the service and the provider discloses its out-of-network status, an estimate of fees, and a description of the circumstances under which the patient would be responsible for additional charges.
The Texas Department of Insurance promulgated emergency rules to implement SB 1264 on December 18, 2019, which then went into effect simultaneously with SB 1264's other provisions on January 1, 2020. The emergency rules added additional detail and requirements to SB 1264's other requirements. One additional requirement is that an out-of-network provider cannot "balance bill" a patient unless the patient had a meaningful choice between an out-of-network provider and an in-network provider, and was not coerced to accept an out-of-network provider. Also, TDI adopted a state form (AH025) as the standard notice and disclosure form for non-emergency services, and requires that the provider disclose the required elements using that form (without any alterations) no less than 10 business days in advance of the service.
SB 1264 and its regulations apply to all state-regulated insurance plans as well as coverage through teacher or state employee retirement systems. However, it would not apply to other ERISA-preempted plans, such as most self-insured or self-funded employer coverage or Medicare.
SB 1264 also changes and expands the out-of-network dispute resolution procedures adopted in Texas over the past several years, including mediation for most claims and binding arbitration for non-facilities.
In order to comply with SB 1264, all providers who are out-of-network with any benefit plan in Texas should closely examine their policies and procedures, disclosures and other paperwork provided to patients and review billing practices with any third-party billing provider. Providers should also familiarize themselves with TDI's dispute resolution procedures.
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