Currently, there is a negative view of freestanding emergency rooms (FSERs) in the state of Texas due to the concept of balance billing. Many patients believe that FSERs balance bill their patients since many of them are out-of-network with many of the large insurance carriers. While many FSERs do in fact practice balance billing, there are many others that do not. Instead, there are some FSERs that bill their patients according to the allowed amount determined by the insurance carrier. However, for those patients that have been balance billed, there is now a way for them to fight this.
First, in order to understand what balance billing is, one must understand what an “allowed amount” is. As a healthcare provider, when you submit a claim to an insurance carrier if the claim totals $1,000 and the insurance carrier approves $500 of the charges, this $500 would be considered the allowed amount. The allowed amount can be a combination of a payment from the insurance carrier, as well as any amount applied to the patient’s responsibility (deductible, coinsurance, etc.) according to the patient’s current insurance plan. As an out-of-network provider, you have the right to bill the patient above the $500 allowed amount up to the full charge amount of $1,000. Billing the patient for any remaining amount above the allowed amount is considered balance billing. Earlier this year, the Texas legislature approved SB 507, which gives patients a course of action when they are balance billed by an out-of-network provider.
Under SB 507, the Texas Department of Insurance (TDI) expanded their current out-of-network provider mediation program to include services provided at Texas freestanding emergency rooms. This program allows patients to seek mediation between the healthcare provider and insurance carrier if the patient is balance billed, not including any copayment, deductible, or coinsurance amounts. While the healthcare provider and insurance carrier will meet to discuss the bill, the patient’s participation in the mediation is voluntary.
The TDI’s website states that under SB 507, a patient can qualify for mediation if the claim meets the following criteria:
- The patient is insured by a preferred provider organization (PPO), or is covered by the Employees Retirement System of Texas (ERS).
- The patient received medical services from an out-of-network hospital-based physician.
- The hospital in which services were rendered is a preferred provider under the patient’s preferred provider benefit plan.
- The patient was seen on or after September 1st, 2015 and was balance billed in excess of $1,000, or the patient was seen on or after January 1st, 2018 and was balanced billed in excess of $500.
According to TDI, the goal of the mediation will be to reach an agreement on the amount charged by the provider, the amount paid by the insurance, and the amount due from the patient. If the mediation is unsuccessful, the patient can also attempt to resolve the claim in court. Also, while the mediation is taking place, the healthcare provider cannot attempt to collect any portion of the balance billed amount from the patient until the mediation ends or the mediation request is withdrawn.