Hancock, Smithee Legislation Would Grant State Authority To Protect Texans Against Price-Gouging in Emergency Medical Situations

AUSTIN— Yesterday, the Texas Association of Health Plans (TAHP), the statewide trade association representing commercial and public health plans operating in Texas, applauded Texas Senator Kelly Hancock and House Rep. John Smithee’s introduction of legislation (SB 2064 and HB 3867) to protect Texans from price-gouging for emergency care provided by freestanding emergency rooms and hospital-based emergency rooms. Texas is home to more than half the nation’s population of freestanding ERs (FSERS), a relatively new, lucrative business model in which independent FSERs typically set up shop in affluent, suburban, commercial areas with a high population of insured consumers; choose to remain out of network so they can charge up to 10 times more than similar urgent care centers; and mislead consumers by telling them they “accept” their insurance, when in reality most are not in their insurance networks. In their recent editorial “Billing abuses at standalone emergency care centers are costing Texans a hefty chunk of change,” the Dallas Morning News editorial board wrote: “Consumers shouldn’t be stunned with predatory charges when they make a health care choice…Some freestanding emergency rooms even tell patients that their insurance will cover the procedure when they know that the facility or the doctor are not in the health plan network. Such misleading behavior is unconscionable.”

While freestanding ERs pose the highest risk for expensive surprise bills, overall emergency care costs in Texas are growing rapidly. Texas is home to some of the highest rates of surprise billing in the nation; some of the highest emergency care costs in the country (one major Texas insurer is spending 67 % more on ER care in Texas than any other state and the average ER facility charge in Texas is 36% higher than the rest of the country); and some of the highest rates of out-of-network ER doctors. A recent study by Austin’s Center for Public Policy Priorities found that in 300 in-network hospitals in Texas, there is not a single in-network ER doctor.

Under current law, the Texas Attorney General Consumer Protection Division has the authority to takes steps to stop any attempts to price-gouge Texans seeking goods and services during natural emergencies and declared disasters. In the same vein, SB 2064 and HB 3867, would ensure that Texas freestanding emergency rooms and hospital-based ERs are not permitted to charge unconscionable prices when Texans face personal medical emergencies and visit their facilities for emergency care.

“An emergency medical situation presents enough stress without the addition of a surprise medical bill for thousands of dollars,” said Jamie Dudensing, TAHP CEO and a former practicing nurse. “Freestanding ERs are confusing Texans across the state with misleading advertising convincing them they are in their insurance networks, but surprising them later with exorbitant, out-of-network bills and no recourse to challenge them. Costs for emergency care at traditional hospital ERs are also on the rise and sending Texans into medical debt.

“Just as Texans are protected from price-gouging during natural disasters like a hurricane, so they should be protected from price-gouging in an emergency care situation. Sen. Hancock and Rep. Smithee’s proposals take important steps to better protect consumers in medical emergencies. Responsibly seeking care for chest pains or the like shouldn’t mean incurring thousands in debt.”

Similar to current protections available in declared emergencies, Sen. Hancock and Rep. Smithee’s bills grant the Texas Attorney General Consumer Protection Division discretion to act to protect Texans from financially devastating emergency care prices when they seek help in a personal medical emergency.

Background & Resources:

  • There are more than 200 FSERs in Texas – more than half the nation’s population of these facilities.
  • Freestanding ERs pose the highest risk or surprise medical bills for Texans and are responsible for nearly 70 percent of out-of-network emergency facility claims in Texas.
  • Charge for treating a cough at a freestanding ER: $3,044. Treating a cough at an urgent care center: $180.
  • Texas is home to some of the highest rates of out-of-network ER physicians: 50% of ER physician claims are out of network.
  • Texas has some of the highest rates of surprise billing in the U.S. – McAllen, TX has seen 89% surprise billing rates.
  • Some of the highest emergency care costs: Texas ER spending by a major health plan is 67% more expensive than the rest of the nation, and the average ER facility charge in Texas is 36% higher than the rest of the country.

Read more about the emergency care cost crisis in Texas, along with background on freestanding ERs and how they use misleading advertising, charge exorbitant prices, and refuse to go in network:

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The Texas Association of Health Plans

The Texas Association of Health Plans (TAHP) is the statewide trade association representing private health insurers, health maintenance organizations, and other related health care entities operating in Texas. Our members provide health and supplemental benefits to Texans through employer-sponsored coverage, the individual insurance market, and public programs such as Medicare and Medicaid. TAHP advocates for public and private health care solutions that improve the affordability, access and accountability of health care for many Texans. As the voice for health plans in Texas, TAHP strives to increase public awareness about our members’ services, health care delivery benefits and contributions to communities across Texas.