AUSTIN— The Texas Association of Health Plans (TAHP), filed suit today to challenge overreaching state regulations that make Texans more vulnerable to costly, surprise medical bills and drive up the cost of health insurance premiums for Texas employers and families.
TAHP is the statewide trade association representing commercial and public health plans operating in Texas. TAHP’s legal challenge contends that the Texas Department of Insurance
(TDI) adopted regulations inconsistent with and without a basis in Texas law as enacted by the Legislature. Those regulations, among other things, mandate payment of out-of-network provider charges that are often 500% to 600% of what is paid by Medicare.
“Health care is expensive enough for Texans. While certain government regulations are both necessary and effective, the TDI payment mandates concerning out-of-network providers and facilities are overreaching, drive up the cost of health care, and go against the best interest of Texans,” said Jamie Dudensing, TAHP CEO.
Background on Emergency Care Cost Crisis in Texas
The rules challenged today have caused Texas consumers to bear the expense of some of the highest emergency care costs in the country. Data tells us Texas is home to more than half the nation’s population of freestanding ERs, one of the biggest culprits for surprise medical bills, and is ground zero for sky-high emergency physician and facility charges. Nearly 70 percent of out of network emergency care facility claims in Texas come from freestanding ERs. Many of these facilities are setting up shop across the state, primarily in affluent areas that already have more than sufficient access to emergency care, with a simple business model of remaining out of health plan networks in order to take advantage of Texas regulations that allow out-of-network providers to dictate their own exorbitant payments from health plans and patients. The result is surprise, exorbitant, out-of-network medical bills that are taking up a larger and larger chunks of health care budgets and driving up the cost of premiums for Texas business owners and families.
Read more about the emergency care cost crisis in Texas below:
To view the Petition for Declaratory Judgement, click here.
Background on Legal Challenge
TAHP is bringing this legal challenge to stem the ever upward spiral of emergency and other out-of-network medical costs. TDI’s rules addressed in the lawsuit have exacerbated the emergency care cost crisis, providing direct incentives for emergency care providers to remain out of network and charge high fees. The rules unfairly obstruct private negotiations between health plans and providers by mandating payment amounts to out-of-network emergency care providers while not limiting or even addressing the charges and other marketplace conduct by those providers. What’s worse for consumers is that TDI’s rules do not require those providers to accept the mandated payment amounts as full payment, thus allowing providers to balance bill patients in excess of these payments – often seeking amounts that are many times higher than the rates paid by Medicare. The rules in question financially encourage providers to stay out of network and employ surprise billing and balance billing tactics. This legal challenge is an attempt to create a level playing field for health plans to negotiate fair market rates on behalf of Texas consumers with emergency care providers and those who are currently choosing to remain out-of-network, so that more Texans can have the peace of mind knowing they will not receive exorbitant, surprise, out-of-network bills in emergency medical situations and when seeking medical care.
This legal challenge builds on TAHP’s continuing efforts to reduce out-of-network emergency care costs and protect consumers from surprise billing. TAHP has strongly supported mediation of out-of-network surprise bills and transparency of network status and out-of-network charges. TAHP also consistently submitted comments to TDI during the rulemaking process warning of the adverse effects that would result from adoption of the rules. Although TAHP has today initiated a legal challenge to these harmful regulations, TAHP hopes to have further productive discussions with the current Department administration about a different regulatory approach that protects patients, promotes competition, and improves the affordability of health coverage in Texas.