Above: Nearly half of Americans report having gotten a surprise medical bill.
Patient advocates in Texas celebrated this spring, when they finally hit a major milestone in the decade-long fight against surprise medical bills. Amid a flood ofmedia attention spotlighting patients who had been hit with astronomical hospital charges for procedures they thought were covered by their insurance, lawmakers took up the issue. In May, the Legislature passed one of the nation’s strongest laws against surprise medical bills—a rare bipartisan measure that was touted both by state Democrats and Lieutenant Governor Dan Patrick.
Then, a curveball: The Texas Medical Board, tasked with implementing parts of the law, proposed rules that would have dramatically widened a narrow exception for patients who intentionally seek out nonemergency care from out-of-network doctors. Patient advocates said that the proposed rule would have created a major loophole that undermined the very point of the protections. The board, primarily comprised of doctors, said that was not its intent and that it supports the new law. But advocates countered that the rules, proposed in October, would have required all doctors to give patients confusing waiver forms, which could leave them mistakenly agreeing to hefty bills in nonemergency situations. Patrick released a stern statement threatening to reject the Senate appointments of board members who approved the changes. Then, late last week, the board relented in a surprise reversal, announcing it would turn over its rulemaking to another agency with authority over a wider swath of the providers impacted by the law. (Patient advocates suspect this will be the Texas Department of Insurance.)
Surprise medical bills occur when a patient goes to an in-network hospital and is seen by an-out-of-network provider. They’re the rarest of subjects in Texas politics: an issue with widespread, across-the-aisle support. Yet the last-minute upheaval before the Texas law goes into effect on January 1 is indicative of the tensions and challenges involved in addressing even a relatively narrow problem that almost everyone agrees ought to be solved.
“The question isn’t should we do this, of course we should do it; the question is who pays for it,” says Stacey Pogue, a senior policy analyst at the left-leaning Center for Public Policy Priorities. She’s led efforts over the last decade to end surprise billing in Texas. “There’s a mountain of money at stake in ending surprise medical bills,” Pogue says. “ And if we’re not making patients pay it, it’s either, at a very basic level, the insurance that eats that cost or the provider eats that cost.”
Surprise medical bills are ubiquitous, and each can cost patients anywhere from a few hundred to tens of thousands of dollars they didn’t expect and often cannot afford to pay. Nearly half of Americans report having gotten a surprise medical bill. According to recent polling from the Kaiser Family Foundation, 38 percent of Americans are “very worried” about being able to afford these bills—more concerned than they are about paying for rent, food, and health insurance premiums.
Texas’ law seeks to eliminate these concerns by removing the patient from negotiations regarding surprise medical bills. If a doctor and insurance company can’t agree on a number, an outside arbiter will determine the fair amount for the insurer to pay the provider. The idea is that this incentivizes reasonable price proposals from each party. A handful of other states have adopted a similar approach, while some rely on a system of setting payments according to what in-network providers are paid in the same area.
Similarly, Congress was expected to pass legislation ending surprise medical bills earlier this year, supported by both parties and the White House. But efforts have been repeatedly waylaid, with stakeholders battling over the details. On December 8, congressional leaders announced a bipartisan agreement that they hope will break through the stalemate.
Many Texans are relying on Congress to come up with a fix. The Texas law applies only to state-regulated plans like those through the individual insurance marketplace, through small businesses with fewer than 50 employees, and held by state employees. It does not apply to federally regulated health plans, which make up about 40 percent of plans in the state. Among large employer plans, which are regulated by the federal government and not included under the state law, Texas is one of the nation’s worst offenders: 38 percent of all ER visits here led to surprise bills in 2017, more than in any other state, as did 27 percent of hospital stays. And then there are the millions who don’t have any insurance in Texas, which has the highest uninsured rate in the nation. They aren’t affected by either state or federal legislation. They’re more likely to be poorer and unable to pay, but face charges for the full cost of high hospital bills.
Those protected under Texas’ law will see changes in less than a month, though details still need to be ironed out by the as-yet-unannounced agency that will take this on. Pogue says she’s hopeful that this time around, there won’t be a loophole. But she’ll be watching closely. “In every wrinkle in surprise billing, there’s somebody who stands to gain or lose a lot of money,” she says. “And it means I’m always surprised about whatever’s going to happen next.”