HEALTH INDUSTRY ONLINE - New Billing Disclosure Requirements for Texas Health Care Facilities and Physicians

Beginning September 1, 2007, certain health care facilities and physicians in Texas must comply with SB 1731, a new billing disclosure law enacted by the 80th Texas legislature. SB 1731 seeks to provide consumers access to health care information relating to the cost of health care services and to improve consumer access to cost-related information by imposing disclosure requirements upon certain healthcare facilities and physicians. By providing consumers access to health care provider and health plan cost data, consumers may be able to make appropriate and cost-effective health choices.

SB 1731 imposes a number of requirements upon ambulatory surgical centers, birthing centers, hospitals licensed by the Texas Department of State Health Services (“Facilities”) and physicians. Facilities and physicians are required to develop, implement and enforce written policies for the billing of health care services and supplies. These policies must address the following: (1) any discounting of health care charges to certain uninsured and certain financially or medically indigent patients, (2) the providing of itemized statements of billed services to a requesting patient, (3) the application and rate of interest charged for billed services that are not covered by a third party payor and (4) the procedure for handling patient complaints regarding charges for health care services. The policies of Facilities must also address providing written disclosure to a patient regarding the participation of the Facility as a network provider under the consumer’s third party payor coverage and that individuals providing services to the consumer in the Facility may not be a participating provider. SB 1731 does not describe the required specificity of the billing policies; however, the Texas Medical Board has indicated that the policies may be as simple as, for example, one sentence stating that discounting will be done on a facts and circumstances basis.

There must be a clear and conspicuous notice in all Facility and physician office waiting areas that, upon request, the written policies are available for examination.

An estimate of Facility and physician charges for health care services must be provided no later than 10 business days after the date the estimate is requested. For Facilities, this requirement applies to all types of health care services while the requirement applies to physicians only if the requesting patient seeks out-of-network services or if the patient does not have coverage or evidence of coverage. Upon a request for an estimate, Facilities must advise the consumer that such request may delay the provision of health care services, that the actual charge of the service will vary based on the person’s medical condition and may differ from the amount paid for the service, and that the consumer may be personally liable for the health care services.

Facilities and physicians are required to provide patients with itemized statements for health care services or supplies no later than 10 business days after the date on which the statement is requested. The new legislation imposes the additional requirement upon physicians to provide a plain language written explanation of the charges for billed services upon request.

SB 1731 also imposes additional requirements upon radiologists, anesthesiologists, pathologists, emergency department physicians and neonatologists (“Facility-Based Physicians”). If a Facility-Based Physician bills a patient who is covered by a health benefit plan that does not have a contract with the physician, the physician must send a billing statement to the patient that includes the following: (1) an itemized listing of the services and supplies provided along with the dates the services and supplies were provided, (2) a plain-language explanation that the physician is outside the health benefit plan provider network and the health benefit plan has paid a rate which is below the physician’s billed amount, (3) a telephone number the patient may call to discuss the statement or any payment issues, (4) a statement that the patient may call to discuss alternative payment arrangements, (5) a notice that contains contact information for the Texas Medical Board and states the patient may file complaints with the Texas Medical Board, (6) and, for billing statements that exceed $200 net of applicable co-payments or deductibles, a statement in plain language that, if the patient finalizes a payment plan agreement within 45 days of receiving the first billing statement and substantially complies with the agreement, the physician may not furnish adverse information to a consumer reporting agency regarding an amount owed by the patient for the medical treatment.

SB 1731 also imposes a deadline upon Facilities and physicians for refunds of overpayment for health care services. Both Facilities and physicians must refund the amount of an overpayment no later than the 30th day after the date the Facility or physician determines an overpayment has been made. The 30 day deadline does not apply to overpayments relating to a PPO or HMO.

Though the focus of this article has been on the health care cost disclosure requirements imposed by SB 1731 upon Facilities and physicians, it is important to the note that the new legislation also imposes obligations upon various state administrative agencies and health plans in its effort to provide consumers with access to health care pricing information. SB 1731 requires the Texas Department of State Health Services to create and make available on its Web site a consumer guide to health care. The guide is to include information concerning billing policies, estimated charges and personal liability for payment. The Texas Department of Insurance is required to create a data collection program to collect and evaluate information about reimbursement rates that health plans pay to insurers. SB 1731 also requires health benefit plans that provide health care through a provider network to give notice to enrollees that a facility-based physician or other health care practitioner may not be included in the health benefit plan provider network and such out-of-network health care providers may balance bill the enrollee. Furthermore, HMOs and PPOs are required to include in their annual reports to the Texas Department of Insurance information regarding enrollee satisfaction, quality of care evaluations, coverage areas, accreditation status, premium and plan costs and increases, range of benefits, copayments and other plan details.