As a leading national outsourced revenue cycle management company providing medical billing services in Texas, we frequently get questions about Texas medical billing rules, laws, and regulations and in particular whether or not it is legal to balance bill a patient in full as well as whether it is legal to NOT balance bill the patient in full. There is a lot of nuance to this question and some of our other articles on this subject handle some of the variations. This article only deals with the laws of for Texas medical billing specifically.
It goes without saying that all government patients must be billed any and all balances, although Medicare patients do not typically have coinsurance on labs. They do however have deductibles typically, so we would bill this in all cases to be compliant. The information presented herein is solely related to commercial payers.
- Medicare Civil Monetary Penalty Statute
- OIG concerns
If there are any federal laws that govern this issue, they would need to be followed for Texas medical billing, as well. At this time we are not aware of any federal laws that cover commercial payer relationships.
There may be both statutory and case law relating to determining if balancing patients is required. It appears that if the payer contract requires this, case law has held that copays, coinsurance, and deductibles should be charged. This white paper is not intended to be on the subject of whether or not providers must balance bill if contracted.
Texas State Law
Both of the following deal with medical billing in Texas for HMOs specifically:
Tex. Ins. Code § 843.361
Tex. Admin. Code § 11.810(b)(9)
This appears to be for contracted providers only:
TEX IN. CODE ANN. § 1204.055
CONTRACTUAL RESPONSIBILITY FOR DEDUCTIBLES AND COPAYMENTS
(a) The payment of benefits under an assignment does not relieve a covered person of a contractual obligation to pay a deductible or copayment.
(b) A physician or other health care provider may not waive a deductible or copayment by the acceptance of an assignment.
One question seems to be whether a general fraud statute would apply to Texas medical billing companies billing for out of network providers, such as:
Tex. Penal Code § 35.02(a), Tex. Penal Code § 35.02(b)
- If a person, with intent to defraud or deceive an insurer causes to be prepared or presents to an insurer in support of a claim for payment under a health or property and casualty insurance policy a statement that the person knows contains false or misleading information concerning a matter that is material to the claim, and the matter affects a person’s right to payment or the amount of a payment to which a person is entitled; or
- Solicits, offers, pays or receives a benefit in connection with the furnishing of healthcare goods or services for which a claim for payment is submitted under a health or property and casualty insurance policy
The question is whether waiving a balance could be viewed as a patient inducement and whether these statutes could be interpreted to prohibit patient inducements.
Preventing Surprise Balance Billing
Texas Senate Bill 481 does not prevent balance billing by out of network providers for PPOs, although it does offer mediation if the bill is over $500 and a complaint resolution process.
Attorneys General Opinions are not in of themselves laws, although they indicate how the state interprets its existing laws and whether it intends to prosecute anyone under those statutes. It is often helpful to review the AG opinions and potentially even submit to the AG for an opinion if clarification is desired. There is one AG opinion governing medical billing in Texas related to patient balance billing:
- Texas Attorney General Opinion DM-215 (April 13, 1993)
- Section 4(c) of Article 21.24.1 “…operates only to clarify that acceptance of assignment does not relieve a health care provider of any obligations incumbent on him to bill for or collect a co-payment or deductible amount.”
- Cautions that a healthcare provider would be ill advised to represent to a client or prospective client that a deductible or copayment will be waived in order to induce that individual to use the healthcare provider’s services
The Texas Department of State Health Services and the Texas Department of Insurance in letters wrote:
Letter (Feb. 15, 2005)
- Advised that providers should not be waiving patient copayment and deductible responsibilities to attract patients to the non-contracted provider or facility. TDSHS warned that “enforcement action may be taken including administrative penalties, suspension, denial, or revocation of the hospital’s license.”
- Cited Ins. Code Art. 21-24-1 (1204.055 [see above])
- Hospitals may be cited for violations of 25 TAC § 121(a)(1)(F)
Letter (Dec 9 2005)
- Referenced 1204.055, AG Opinion DM-215, 22 TAC § 164.3; and warned of allegations of fraud and violations of Texas Occupations Code § 101.203 and Texas Health & Safety Code § 311.0025 for provider’s failure to disclose waiver
Case law is rapidly changing both in Texas and in other states. Payers frustrated either with the lack of laws in their favor or the willingness of state legislatures to enact new statutes have taken to suing providers under existing laws, especially fraud statutes. We will write a separate article about all of the cases that have recently been adjudicated or are in the process of being litigated currently. Following is some information about Texas medical billing specifically.
Aetna is the leading litigant when it comes to these out-of-network balance billing cases. Aetna has sued several out of network providers in several states, including Texas. The case is Aetna v Humble Surgical Center, Harris County state court case dismissed 4/17/12; filed in U.S. District Court for the Southern District of Texas, Civil Action No. 4:12-ev-1206. Aetna seemed to trying to set a legal precedent since they refused to arbitrate. Some of the state medical societies have counter-sued Aetna, including the California Medical Assoc (CMA). On Dec 31, 2016, Aetna won against Humble a $41.4 million verdict. In a scathing opinion which described the hospital as “filthy up to the elbows from lies and corrupt bargains”, the judge held that Humble Surgical Hospital employed kickbacks to referring physicians that and that Humble submitted “inflated” claims to Aetna.
Contrarily, CIGNA had also sued Humble in 2016, but received a crushing defeat as a $13.1 million award in a counterclaim was given to Humble for CIGNA’s “failure to pay benefits to covered patients” and CIGNA “abused its discretion by obstinately denying provider’s claims”.
Protecting Against Payer Retaliation
Insurance companies have increasingly fought aggressively and sometimes even illegally against providers in their attempt to reduce their claims payments. There are some medical billing laws in Texas that protect providers against retaliation from insurance companies:
- Interference with Relationship Between Patient and Physician or Health Care Provider Prohibited – Tex. Ins. Code § 1301.067
- An insurer may not in any way penalize, terminate the participation of, or refuse to compensate for covered services a physician or healthcare provider for discussing or communicating with a current, prospective, or former patient, or a person designated by a patient, pursuant to this section.
- BCBS 2009 Agreement with Texas Attorney General
- Resolved investigation into Blue Cross’ handling of out-of-network referrals
- State investigators alleged Blue Cross threatened to terminate physicians solely on the basis of referring their patients for medically needed treatments from qualified specialists that were outside the Blue Cross provider network
- “It is not appropriate to interfere with the protected doctor-patient relationship by terminating a doctor solely for making good faith out-of-network referrals for necessary care.” – Attorney General Abbott
- Under Texas law, insurance providers cannot interfere with patients’ right to receive medical advice from their doctors. That legally protected advice includes treatment options, healthcare-related recommendations and physician referrals. Doctors have a right – and a duty – to inform patients about treatment options without interference from health insurance providers.
- Assurance of Voluntary Compliance
- “BCBS agrees it will not take, or threaten, any adverse action against a Texas physician based solely on that physician communicating with a patient about medically necessary treatment options or referring a patient for medically necessary care outside the limited BCBS network. Nothing in this section shall prevent BCBS from taking any action that is otherwise permitted by law.”
Legislation – S.B. 521 / H.B. 1393 – 82(R)-2011
- Prohibits an HMO from:
- Prohibiting, by contract, a provider from providing a patient with information regarding the availability of out-of-network facilities for the treatment of a patient’s medical condition
- Terminating or threatening to terminate an insured’s participation in a preferred provider benefit plan solely because the insured uses an out-of-network provider
- Prohibiting a healthcare provider participating in a preferred provider benefit plan from communicating with a patient about the availability of out-of-network providers
- Terminating or penalizing a healthcare provider participating in a preferred provider plan solely because the provider’s patient uses an out-of-network provider
Other Related Texas Medical Billing Laws
While this is not specifically for patient balance billing, it is worth noting that Texas appears to have a medical billing statute that prevents providers from charging different fees to different patients, sometimes referred to as insurance discrimination.
- 552.003. CHARGING DIFFERENT PRICES; OFFENSE.
(a) A person commits an offense if:
(1) The person knowingly or intentionally charges two different prices for providing the same product or service; and
(2) The higher price charged is based on the fact that an insurer will pay all or part of the price of the product or service.
(b) An offense under this section is a Class B misdemeanor.
Advertising restrictions (Tex. Admin. Code § 164.3 (11-12))
Prohibits physicians from publishing any advertisement that: (11) “represents that health care insurance deductibles or co-payments may be waived or are not applicable to health care services to be provided if the deductibles or co-payments are required;” or (12) “represents that the benefits of a health benefit plan will be accepted as full payment when deductibles or co-payments are required.”
About Apache Health
Apache Health is a revenue cycle management (RCM) analytics, benchmarking, and auditing company. The founders of Apache formerly ran a large RCM company that was acquired by a private equity group in a rollup. Apache’s predictive analytics will benchmark billing performance and project exactly how much more revenue you should earn from your existing volume of patients. Using many factors and a blend of artificial intelligence and specialty specific benchmarks, the model projects whether changing the billing process would improve collections for your particular mix of procedures and payers. Apache Health can help you evaluate whether to outsource the billing, determine which billing company to select to maximize performance, or track in-house billing performance improvement over time.
Legal disclaimer: Apache Health is engaged in the business of healthcare revenue cycle management analytics. We offer information about regulations, rules, and industry practices relating to compliance. Apache has researched that subject and has set forth the results of that research herein. Apache Health is not a law firm and we do not offer legal advice. Apache does not guarantee the completeness nor the accuracy of its research. You should consult with your qualified healthcare attorney.