Texas accident victims may now have less cause to worry about medical bills. This September, two new laws went into effect that protect state consumers from surprise medical bills, while limiting the way medical debts can be reported to credit reporting agencies. Here’s a summary of those changes — and how they may impact your personal injury case.
Texas Legislature Curtails Surprise Medical Bills
Many health insurance plans do not cover treatments provided by out-of-network medical professionals and hospitals. However, in an emergency, choosing in-network care is not always possible or practical.
This often results in surprise medical bills, a practice known as “balance billing.” Surprise medical bills are exactly what they sound like — a charge sent to the patient after care for medical treatment they thought would be covered by insurance.
Insurance providers typically negotiate discounted prices with various doctors and hospitals that they consider “in network.” When these providers sign a network contract, they agree not to charge patients the balance between the full price of treatment and the discounted price.
However, when a patient is unknowingly treated by an out-of-network doctor or hospital, these agreements do not apply. Depending on the type of insurance plan the patient has, the insurance provider may only pay a fraction of the cost of these out-of-network treatments — or none at all. And because these medical providers have no contractual obligation to the insurance carrier, they are allowed to charge patients directly for whatever insurance doesn’t cover.
These surprise bills impact hundreds of thousands of Americans each year. And the practice is on the rise. A 2019 Stanford University study published in JAMA Internal Medicine analyzed emergency admissions and found that over 42 percent of patients had received care from an out-of-network provider, compared to 32 percent in 2010. The mean amount that patients were liable for, meanwhile, nearly tripled, rising from $220 in 2010 to $628 in 2016.
In June, Texas lawmakers passed Senate Bill 1264, which protects Texas consumers from surprise medical bills. The bill essentially makes it illegal for private insurers to bill customers for the balance for out-of-network care in Texas — especially when patients had no choice about where or from whom they received care, such as in an emergency situation.
Instead, the insurance carrier and the provider must enter into a separate arbitration negotiation to agree on payments among themselves. The bill also sets forth a state regulatory process to oversee negotiations and penalties for providers who fail to abide by the law.
All in all, the passage of this legislation should go a long way to protect accident victims from balance billing and surprise medical bills — and hopefully marks the start of a trend among lawmakers to end harmful billing practices.
Out-of-Network Bills Cannot Be Included on Credit Reports
Balance billing often results in mounting medical debts, and if patients are unable to pay them right away, bills often pass to collection agencies. In the past, these agencies were able to report debts like these to credit reporting services, which could significantly impact the individual’s credit. Texas Senate Bill 1037 prohibits creditors from reporting medical debts incurred from treatment by out-of-network providers. This is a critical piece of legislation, especially considering that studies have found that roughly three-quarters of medical bankruptcies were filed by individuals with health insurance.
While these bills represent significant strides to protect insured accident victims, we continue to call upon the Texas legislature — and all lawmakers — to enact stricter laws around hospital billing and health insurance practices.
If you have been injured in an accident, we’re here to help. Contact our Austin personal injury lawyers for a free case evaluation. We can help you understand your rights and options — and stand up to medical providers and health insurance carriers on your behalf. Schedule your consultation now.