Surprise Medical Billing Bill Signed into Law

Yesterday Gov. Abbott signed SB 507 into law, improving consumer protections related to surprise medical billing.

Surprise out-of-network medical bills, sometimes called “balance bills,” happen when insurers and doctors fighting over prices jointly pass the buck to a patient who received out-of-network care unknowingly.

The Texas Legislature has worked to address surprise medical bills consistently over several legislative sessions.  The legislature developed a mediation system for surprise bills in 2009 and improved the system in 2015 and again in 2017 with SB 507.

Surprise billing mediation has worked well for patients who have been able to access the system. Disputes are almost always resolved with a phone call between the doctor’s office and insurer, with actual mediation rarely needed. According to the Texas Department of Insurance, surprise billing mediation has saved Texas consumers more than $5 million in the last two years.

Unfortunately, few Texas patients have managed to access the system – fewer than 4,000 since 2009. CPPP estimates that 250,000 Texans who have a mediation-eligible health plan will get a surprise, out-of-network medical bill in a two-year period. In other words, only a very small fraction of Texans with surprise bills have been able to get help.  SB 507 helps to address this disconnect for consumers by:

·         Extending mediation to cover people with insurance through the Teacher Retirement System of Texas,

·         Extending mediation to cover more health care settings where a patient may get a surprise medical bill, including all emergency care at free-standing ERs and hospitals, and

·         Ensuring that the notice of mediation rights on doctor’s bills and insurance disclosures uses standard language that is easy to understand.

We thank the sponsors of SB 507, Sen. Kelly Hancock and Rep. John Frullo, for fighting on behalf of consumers and improving our existing surprise medical bill mediation system. With this legislation, more Texas patients will be able to challenge surprise medical bills and save money.

Want to learn more about surprise bills? Check out our research here.

Connect with Us
Policy Areas

Stay Connected