Rules Protecting Against Hospital ‘Balance Billing’ Suspended in Texas

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In a move that’s angered consumer advocates and doctor groups, Texas’ top insurance regulator has canceled new rules designed to help consumers avoid getting big bills for out-of-network care.

The rules were meant to give more than four million Texans covered by preferred provider organization health plans, or PPOs, more information about whether they’d pay the higher out-of-network costs if they were hospitalized and seen by a specialist, The Dallas Morning News reported. People are often surprised to be responsible for higher bills for specialists’ services even if the hospital is part of the insurers preferred network.

State Insurance Commissioner Eleanor Kitzman suspended most new protections against “balance billing” in December, six months before they were to take effect. Earlier this summer, she dropped several disclosure requirements from a proposed rewrite of the rules, despite advocacy for them by her predecessor.

Kitzman unveiled her new version in June, writing that making insurance companies disclose holes in their provider networks — as one of the abandoned rules proposed — would “not provide substantial benefit to consumers and may lead to increased premiums.”

Department spokesman Jerry Hagins said that there are still numerous “protections against balance billing” in the tentative rules, which are still under review.

Groups including Consumers Union and the Austin-based Center for Public Policy Priorities, which advocates for low- and middle-income Texans, protested Kitzman’s decisions, saying the version of the rules from Kitzman’s predecessor would have not required insurers to pay for any additional mailings. The insurers would just have had to add information about hospital-based doctors who are in their network to their notices and websites.

But Duane Galligher of the Texas Association of Health Plans said the new labels and information could confuse consumers as well as punish insurers for things over which they have no control, such as hospitals’ decisions to grant admitting privileges to some doctors and not others.

Abandoned disclosures include a requirement for a label on policy documents and provider directories that a hospital with few or no in-network anesthesiologists and ancillary-services doctors be called “limited” and one well-stocked with such providers “approved.” Also abandoned was a requirement that insurers post web-based notices when there’s a decrease by three-quarters or more in the number of hospital-based doctors in a particular specialty.

Kitzman said she had to suspend and reissue the PPO rules because lawmakers voted last year to create a more affordable insurance product called an “exclusive provider organization.” Lawyers, lobbyists and experts at groups representing doctors say changing the rule on PPOs wasn’t necessary.

Kitzman hasn’t revealed yet if she’ll also strip a rule requiring that balanced-billed amounts count toward deductibles and out-of-pocket maximums, something insurers have urged her to kill but consumer advocates favor.