New Texas laws may provide some relief to accident victims concerned with medical bills following a sudden accident. Two new laws passed by the Texas legislature back in September of 2019 provide safeguards for consumers in the event of unforeseen medical bills and limit how medical debts can be reported to credit bureaus. These changes may impact your personal injury claim if you decide to pursue a case for damages following an accident.
Most health insurance policies do not provide coverage for out-of-network medical care, but when you find yourself in an emergency, you are not always able to choose care within your network. This is known as “balance billing,” which leaves accident victims with unexpected medical bills. When this happens, a charge is sent to the patient for treatment that they thought would be covered by their insurance.
Texas Bill Cuts Back on Unfair Billing practices
Insurance companies will usually negotiate discounted prices with physicians and hospitals that they consider as “in network.” These providers agree to charge patients the balance between the full price of treatment and the discounted price when they sign a network contract with the insurance provider.
The issue is that, when patients are unknowingly treated by an out-of-network physician or hospital, these agreements are not in play. The insurance company may only offer a fraction of the cost for these out-of-network treatments depending on the individual policy. In some cases, the insurance provider will not cover anything out-of-network. There is no real obligation for out-of-network healthcare providers to the insurance company, meaning that they can charge patients directly what is not covered under the insurance policy.
Surprise medical bills burden hundreds of thousands of U.S. citizens each year, and statistics reveal that this practice is on the rise. According to a 2019 Stanford University study published in the JAMA Internal Medicine, over 42% of patients had received treatment from an out-of-network provider, a significant increase from 32% of patients back in 2010. However, that’s not the only aspect that has increased dramatically; the amount that patients were liable for nearly tripled during that time, increasing from $220 in 2010 to nearly $628 in 2016.
What’s in the Bill?
Lawmakers from both sides came together to draft legislation to protect people in state-regulated healthcare plans from facing the brunt of excessive bills for out-of-network treatment. The result was Texas Senate Bill 1264, which created an arbitration process for insurers and healthcare providers to negotiate reasonable prices in these cases.
The law intended to obtain fair prices without having to get patients involved. Essentially, the bill makes it illegal for private insurance providers to bill customers for the balance of out-of-network treatment in Texas — especially when patients had no option of where or from whom they received treatment.
The insurance carrier and provider must instead enter into a separate arbitration negotiation to reach an agreement on payment. The bill also establishes a state regulatory process to manage negotiations and penalties for providers who fail to follow the law.
Out-of-Network Bills Will Not Be Included on Your Credit Report
Balance billing is known to leave accident victims with insurmountable medical debts. If patients are unable to pay these bills, they are usually passed off to collection agencies. Before the bill, these agencies were able to report these types of debts to credit reporting bureaus, notably impacting the victim’s credit.
Now, creditors are prohibited from reporting medical debts resulting from treatment by out-of-network providers. This piece of legislation is important because recent studies have found that nearly three-quarters of medical bankruptcies were filed by individuals with health insurance.
This new legislation should provide protection to Texas accident victims from balance billing and unforeseen medical bills. Hopefully, this is just the beginning of a new legislative trend to end unfair billing practices. We need to continue to call upon the Texas legislature to enact stricter laws regarding hospital billing and health insurance practices to ensure that accident victims are not left holding the bill after being unfairly injured by another party.
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After being injured in a car accident, you need the help of a Houston car crash lawyer to help you make the right choices and secure the compensation you need and deserve. The team of personal injury lawyers at the West Loop Law and the Law Office of Nhan Nguyen, MD, JD will fight for your best interests. Nhan Nguyen, MD, JD and Nader A. Rabie, JD treat every case with equal importance, and we focus on getting the effective results our clients deserve. Contact our law offices today at 713-840-7200 to discuss your case with a lawyer who cares.
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