Texas Department of Insurance

Consumer Guide to Health Care Billing

What is balance billing?

Balance billing occurs when physicians or other providers and hospitals or facilities who are not contracted with your HMO or preferred provider benefit plan (often referred to as a “PPO”) bill you for the difference between the amount your health plan pays them and the amount the provider or facility believes to be adequate reimbursement. 

For example, assume you visit the emergency room at a hospital that is contracted with your health plan, but the emergency room physician involved in your care is not contracted with your health plan.  The emergency room physician and the hospital each bill $1,000 for their services, and the health plan pays them each $400.  The hospital, which is contracted with your health plan, may only bill you for your appropriate copayments, deductibles, and coinsurance amounts under your plan.  It may not bill you for the additional amount not paid by your health plan. However, the emergency room physician, who is not contracted with your health plan, can bill you for the appropriate copayments, deductibles, and coinsurance amounts and for the remaining $600.

What can you do about balance billing?

Make sure your health care providers and facilities are contracted with your plan.
The most important thing you can do to prevent being balance billed is to find out in advance whether your health care providers, including hospitals, clinics, and other facilities, are contracted with your health plan.  This is important because contracted providers are prohibited from balance billing you for anything over their contracted reimbursement rate for covered services and for anything other than copayments, deductibles, and coinsurance on covered services. 

This is especially significant in the case of facility-based physicians who may become involved in your treatment, such as radiologists, anesthesiologists, pathologists, emergency room physicians, and neonatologists.  Remember that even if a facility is in your health plan’s network, some physicians who provide services there may not be. You may be able to prevent balance billing by asking that a contracted  provider be assigned to your care. In certain circumstances, this option may not be available to you. For example, a hospital might contract with a group of doctors who are not in your network to provide emergency room care.

Additionally, find out whether the services you will be receiving are covered under your health plan.  If the services are not covered, you will be responsible for all charges.

Find out in advance how much you might be balance billed.
If you know you are going to be treated by a provider not under contract with your health plan, you may be able to find out in advance how much you will have to pay.  Texas law gives patients the right to request, in advance, estimates of charges from providers and facilities and estimated payments from health plans.  Providers, facilities, and health plans have 10 days to produce the estimates, so you won’t be able to get them in advance in cases of emergencies.  Also, some health plans have websites that provide this information, and you can get information about fees for routine services at various Texas hospitals at www.txpricepoint.org.  The estimated payment the health plan gives you should reflect what is covered under the insurance policy as well as any deductibles, copayments, coinsurance, or other amounts for which you are responsible.

By comparing the provider and facility charge estimates to the health plan’s estimated payments, you may be able to come up with a reasonable estimate of how much you might be balance billed.

Work out payment options in advance.
If no contracted providers are available, your health plan might be able to work out a discounted payment arrangement in advance.  In some limited circumstances, the health plan may be required to ensure that you are not balance billed.  You may also be able to directly negotiate payment options in advance with your provider.

Work out payment options afterward.
Even if you have been surprised with a bill from an uncontracted provider, you still may have options.  If you think your health plan has not paid what it should have under your policy, contact your health plan to discuss the issue. If you are still not satisfied, file a complaint with the Texas Department of Insurance (TDI) at www.tdi.state.tx.us/consumer/complfrm.html.

If you think your provider or facility has overcharged you, discuss your concerns with them.  Texas law requires providers and facilities to provide an itemized statement of the bill on request in most situations, so review the charges carefully.  You may also be able to negotiate an extended payment plan with a provider or facility, and some providers or facilities may accept a reduced payment in exchange for immediate payment.  Keep in mind that many of the bills will come separately, and therefore you will need to negotiate with each provider.

Determine if mediation is available.
In some circumstances, you may be able to require your provider and your carrier to attend mediation to try to work out the claim.  If the mediation is unsuccessful, you may also be able to require that they resolve the dispute with you in court.

For more information about mediation for out-of-network hospital-based health care provider claims and to determine if you're eligible for mediation, visit www.tdi.state.tx.us/consumer/cpmmediation.htm.

Consider whether the parties would agree to mediation.
As a way to avoid costly litigation, the parties might voluntarily consider seeking to mediate their dispute.  The University of Texas Center for Public Policy Dispute Resolution has resources for those considering mediation, including links to local community dispute resolution centers: www.utexas.edu/law/academics/centers/cppdr.

Complain to the correct agency.
If you believe you have been treated unfairly, file a complaint with the agency that regulates your provider, facility, or health plan.

File complaints against physicians with the Texas Medical Board at www.tmb.state.tx.us/consumers/complain/placecomp.php.

File complaints against facilities, such as hospitals or ambulatory surgical centers, with the Texas Department of State Health Services at www.dshs.state.tx.us/hfp/complain.shtm.

File complaints against licensed health maintenance organizations and health insurance companies with the TDI at www.tdi.state.tx.us/consumer/complfrm.html.

Get more information
Texas law gives consumers the right to get certain billing information from their health plans and provides other consumer protections. Read the text of the law at www.capitol.state.tx.us/tlodocs/80R/billtext/html/SB01731F.htm. Keep in mind that the law only applies to fully insured health plans, not to government-sponsored or self-funded employer plans, also known as ERISA plans.

To get consumer information about physicians from the Texas Medical Board, visit www.tmb.state.tx.us/consumerbrochure.php. To get consumer information about facilities and read the Consumer Guide to Health Care published by the Texas Department of State Health Services, visit  www.dshs.state.tx.us/thcic/consumerguide/consumerguide.shtm.

To get more information about health insurance coverage from TDI, visit www.tdi.state.tx.us/health/index.html.

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