Most insurance companies not complying with billing transparency law

AUSTIN - New state regulations meant to protect Texans from unfair medical bills largely have been ignored by many health insurance companies, and state officials have done little about it, according to public records.

The new rules require insurance companies to submit reports to the Texas Department of Insurance detailing the adequacy of their health care networks.

According to insurance department records, however, reports for only 25 of the 140 preferred provider plans offered in Texas were submitted by an April 1 deadline. And after more than seven months in which regulators have not levied any sanctions, only three more providers have submitted reports.

Without the reports, state officials have no way to tell if insurance plans being sold to millions of Texans include enough choice of health care providers for the prices that consumers are paying.

"We can't verify that (the insurance companies) do, indeed, have an adequate network, and that's concerning," acknowledged Debra Diaz-Lara, director of the insurance department's managed care quality assurance office.

Department spokesman John Greeley said the insurance companies deserve leeway because this was the first year in which the reports were required.

"It's a new requirement," Greeley said. "We're not trying to hold anything hard and fast until we make sure everybody understands the requirements, and the goal here is to get compliance."

Some state lawmakers said the inability of the department to collect the reports is a problem.

State Rep. Trey Martinez Fischer called it "a big deal."

"My hope and expectation is that the department will make a very serious inquiry into determining what are the challenges to presenting the report," said the San Antonio Democrat, who has co-sponsored medical transparency legislation. "You can't begin to monitor an issue as important as health care networks if the health care providers are not providing the necessary information."

Advocates said the issue is another illustration of how Texas is failing to do enough to stop high bills that can range from inconvenient to bankruptcy-inducing.

'Balance bill' gaps

Public attention and legislative action in recent years has focused on "balance bills" that patients receive when they visit a hospital in their insurance plan's network but are seen by emergency room doctors or other staffers that are not in the network.

That can leave a large gap between what the staffer charges and what the insurance company is willing to pay. Patients ultimately are responsible for the gap, called a "balance bill."

Network adequacy is a related but broader problem because it also speaks to the issue of whether a patient has a sufficient number of in-network hospitals and providers to visit under an insurance plan.

Lawmakers have worked to increase transparency around network adequacy, and the new regulations were meant to support that. The annual reports are required to include data on complaints and claims for in-network versus out-of-network benefits.

"Network adequacy is one of the biggest problems that consumers face, so to the extent that these companies aren't complying with the law, we see that as a problem," said Blake Hutson, a Texas-based health care expert for the national Consumer's Union advocacy group, calling it "ridiculous" that the state has not been able to collect more reports.

Jamie Dudensing, CEO of the Texas Association of Health Plans and a former adviser to Lt. Gov. David Dewhurst, disputed that, saying regulators have other ways to collect data about network adequacy and balance billing. She added that most of the biggest insurance companies operating in the state have filed reports.

Consumer, victim

Department of Insurance records show that several big insurers have filed reports, but others who collectively cover millions of Texans have not, including Humana, the third biggest provider of health insurance in the state.

Humana did not respond to requests seeking comment.

One recent victim of balance billing said it was upsetting that the state has not collected more reports.

Don Hawkins said he had not worried about money when he entered Heart Hospital of Austin for an emergency appendectomy last May. The 53-year-old was a businessman, with good health insurance, being treated at a facility in his plan's network.

Where's the state?

The bills that started arriving a week later told a different story, however: Despite the hospital's status, three people involved in the operation were not in his provider network and were requesting hundreds of dollars more than his insurance would cover - including, he said, a doctor who had only briefly observed but was charging $600.

Hawkins called his insurance company, Cigna, but was told he had to pay, which he eventually did.

The company had not filed its complete report as of last month, according to the state.

Cigna spokeswoman Amy Turkington Szable said the company accidentally had filed an incomplete report because of a miscommunication. It since has rectified the problem, she said.

Nevertheless, Hawkins said the state should do a better job of collecting reports.

"We both know how the State of Texas is regarding regulation. It's not a high priority," he said. "I don't feel good about it. I pay taxes in this state, and the state needs to do their job."