Thousands of Texans seeking government help with surprise medical bills were hit with another shock last year: a clogged-up consumer protection bureaucracy.
A massive backlog that began last summer left state regulators unable to provide timely help to the thousands of Texans who requested mediation from the Texas Department of Insurance.
“It’s going to take us a while to get out of this backlog that we’re in, but we’re doing the things necessary to help more consumers,” said associate commissioner Chris Herrick.
The overwhelmed state mediation program highlights the widespread problem of surprise emergency medical bills, an issue that has sparked bipartisan outrage in Washington and Austin alike. In recent weeks, both President Donald Trump and U.S. House Speaker Nancy Pelosi have vowed reforms. Closer to home, the Texas Legislature has given state regulators increasing authority to force insurers and providers to the negotiating table.
Surprise medical bills, or balance bills, result when insurers and health care providers can’t agree on the price of a medical treatment, leaving the patient to make up any costs the insurer won’t pay. The problem is particularly acute in Texas, where one in three emergency room admissions results in a surprise bill — nearly twice the national average, according to the Texas Association of Health Plans.
Although the state’s mediation program was created in 2009, many Texans didn’t qualify until reforms in 2015 and 2017 — passed with bipartisan majorities in the Legislature — lowered the threshold to participate and dramatically expanded the number of patients eligible.
Regulators believe those reforms, along with increased awareness and media attention — like Kaiser Health News' and NPR's coverage of an Austin school teacher who received a $109,000 surprise bill after suffering a heart attack — caused demand for mediation to skyrocket, they told The Texas Tribune.
"Because of those changes, our requests exploded," said the agency’s spokeswoman, Stephanie Goodman. “We're seeing routinely, starting this summer, three to four times the number of requests per month that we got last year.”
To put the demand in perspective, the Texas Department of Insurance received just 43 requests for mediation in 2013. The following year, the number surged to more than 600 — and the numbers have climbed steeply ever since. The requests hit a record high of 4,519 in 2018, and regulators expect 8,000 this fiscal year.
Herrick, the agency's associate commissioner and head of the complaint processing unit, encountered a backlog of about 4,000 mediation requests when he assumed responsibility of the program in the fall. At the time, there were only two staffers assigned to handle the requests. He added eight employees and is in the process of hiring two more.
Under Herrick, the unit worked quickly to complete the basic — but key — step of entering complaints made by qualifying consumers into the state’s system. Acknowledgement letters, noting that the patient had sought mediation, were then sent to providers and insurers, effectively stopping the clock on bill collection efforts.
“For the consumer, that's when the protection begins,” Goodman said.
From there, insurers and providers have 30 days to hold an informal telephone conference. If the bill can’t be reconciled, the case is referred to the State Office of Administrative Hearings for a formal mediation, which must occur within 180 days of the patient’s request.
Working through the backlog has been “kind of like the snake eating the mouse,” Goodman said. While the agency has caught up, “once you get the letters out, you start really following up to make sure they have the teleconference.”
Most cases are resolved in the informal conference; about 1,100, one-tenth of those eligible, have been sent to SOAH since 2013.
Under current statute, not every insured Texan can seek recourse through the mediation program; Texans enrolled in federal programs like Medicaid and Medicare or in plans governed by the Employee Retirement Income Security Act are excluded. (Insurance department officials recommend consumers call the agency’s hotline — 1-800-252-3439 — to see if they qualify or were caught in the backlog.)
For those who qualify, limited state data suggests the program yields quick results.
In 2018 alone, the agency received complaints about $8.8 million in qualifying surprise bills. After just the informal telephone conference, insurers coughed up $1.6 million more for those cases.
But there's one glaring omission in the records tracked by the state: how much relief was passed on to the consumer. Goodman said when the insurance company agrees to pay more, it lowers the amount the consumer owes the provider, such as an emergency room doctor or an anesthesiologist. But she said the department does not keep track of how much the consumer pays at the end of the process.
“What we hear anecdotally is [that with] the additional payments, pretty much always, the bill goes away. That's what we hear over and over from the consumer: ‘I didn't get another bill.’” Goodman said. “It’s working today; I’m not saying there is a problem. But you could look at it [in the statute], and there’s probably places to tighten it.”
Agency officials don’t foresee a slowdown in the volume of requests coming in. But they said they’ve already made strides to improve internal processes to prevent another backlog from choking the system. Kent Sullivan, who was appointed insurance commissioner in late 2017, has pushed the agency to update its technology and shifted more resources to handle consumer complaints, about half of which concern health care claims. He said that as the fifth commissioner in seven years, he found an agency that “needed significant modernizations, and we’re making overdue changes.”
“We’ve worked to provide solutions for immediate problems while simultaneously making long-term improvements. It’s somewhat like trying to rebuild the firehouse while you’re answering calls to put out fires," he said.
But state Sen. Kelly Hancock, the North Richland Hills Republican who helped create the mediation program, said he plans to file new and sweeping reforms this session to ensure patients don’t have to deal with the repercussions of shock ER bills at all.
“At the end of the day, no matter how hard we work to improve and expand patient-triggered mediation, patients can still get caught in the middle, so I'm finished with that,” he said. “It's time to take this off the patients' plates entirely, and I'll be filing legislation to do that very soon. Stay tuned."