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Texas: Plastic Surgery Works to Shape OON Bill

The issue of out-of-network billing has been on the radar of the Texas Legislature since 2009, when legislators passed a first-in-the-nation system that allowed patients to appeal certain types of unanticipated medical bills using a mediation process. Since then, Texans have relied on that system – which was thought to work well on behalf of patients. However, upon further review of the system and consultation of the involved stakeholders, there was another push for updated legislative language that would further protect patients from surprise bills.

The process of analyzing the state's 2009 law and crafting improved statutory language began in 2018. During that time, the Texas Society of Plastic Surgeons (TSPS) monitored off-session committee activity on the issue and took part in several stakeholder meetings that occurred during the latter months of last year. Through that process, TSPS worked with ASPS to ensure that the state's plastic surgeons had a seat at the policymaking table.

Once the 2019 legislative session began, several pieces of legislation that attempted to address this issue emerged. Unfortunately, none of the proposals were acceptable to the house of medicine. Therefore, TSPS worked with other physician stakeholder groups to lean on lawmakers to amend the legislation. ASPS partnered with TSPS through the State Partnership Advocacy Grant Program, which awarded the state plastic surgery society a $10,000 grant to fund advocacy activities.

TSPS and other medical specialties on the ground focused their efforts on the bill that was the most likely to advance through the Legislature – a measure sponsored by Senator Kelly Hancock (Senate Bill 1264). That process culminated in a compromise proposal that bans balance billing in certain scenarios, protects patients so they are only responsible for their in-network cost-sharing, and establishes a dispute resolution system – known colloquially as "baseball-style" arbitration. Baseball arbitration was first implemented by New York to settle out-of-network payment disputes and has a successful track record of impartiality. While the Texas proposal is a major win for patients, ASPS believes that there is still work to be done to protect physicians.

To that end, ASPS reached out to the sponsors of the final bill – Senator Kelly Hancock and Representative Tom Oliverson (a board-certified anesthesiologist) – with suggested amendments that would allow physicians to be reimbursed fairly for their services and strengthen the arbitration requirements. ASPS was concerned that the bill defined the "usual and customary rate" as the relevant allowable amount as described by the applicable master benefit plan document or policy. The new landscape lacks transparency and accountability, and thus includes the potential for insurers to manipulate rates to their benefit. Moreover, ASPS voiced its concerns regarding the inclusion of the 50th percentile of rates paid as a criterion that must be considered during the baseball-style arbitration process. The Society opposes that benchmark as it is not representative of a fair reimbursement – which ASPS believes is the 80th percentile of all billed amounts.

Unfortunately, the bill passed the Legislature without further amendments and Governor Greg Abbott has indicated that he will sign it into law this month. ASPS sent a letter to the governor urging him to work with the Legislature to enact future laws that will ensure that physicians are reimbursed fairly without relying on proprietary insurer data and remove the 50th percentile of rates paid as a criterion that must be considered during arbitration.

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