By: Ben Passey & Jillian Ginger
Imagine you or a loved one are about to have a baby. You have decorated the nursery, stocked up on diapers, and researched in-network hospitals near your home. You provide the hospital with all of your insurance information months in advance, followed by meticulous checking and double-checking that the birth and associated expenses are covered by insurance. You have already hit your yearly deductible, and you do not anticipate incurring any additional out-of-pocket expenses.
Once labor begins, you go to the hospital to speak with your in-network OBGYN and are briefly introduced to an anesthesiologist. All goes well with the delivery and a few days later, you return home with your newborn. A month later, while you are still bleary with exhaustion, you receive a surprise bill in the morning mail. Upon opening it, you discover that the anesthesiologist, who unbeknownst to you was not in-network, is seeking $5,000 for their anesthesia services.
Receiving “surprise bills” was historically commonplace for individuals treated by out-of-network providers at in-network facilities. Surprise bills were especially prevalent in emergency situations, where approximately 20% of patients seeking care from an emergency department unknowingly received services from an out-of-network provider. In addition to emergency services, providers such as anesthesiologists, pathologists, radiologists, assistant surgeons, and ancillary service providers are generally out-of-network despite rendering services at in-network facilities.
In recent years, many states recognized the problem posed by surprise billing and took steps to implement legislation limiting the extent and circumstances where surprise billing is permissible. Texas, with the passing of SB 1264, was among the first wave of states to pass comprehensive legislation protecting against surprise billing.
While state legislation afforded much-needed protections, generally state-level protections applied to only a small subset of insureds in the states. For example, Texas’ SB 1264 applies only to HMOs, PPOs, and EPOs, representing approximately 16-20% of Texas insureds.
Recognizing the need for more sweeping protections, Congress passed the bipartisan No Surprises Act (“NSA”) in December 2020. The NSA offers sweeping protections for insureds in all but a few narrow exceptions. Of particular note, the NSA generally limits an insured’s financial responsibility to in-network cost-sharing and prohibits providers from sending surprise bills.
The NSA took effect on January 1, 2022. While the act affords important protections to insureds, it imposes substantial burdens on medical providers. In the months preceding the effective date of the NSA, various medical provider-governing boards, including the Texas Medical Board (“TMB”), began acting against providers accused of violating state surprise-billing legislation. Historically, TMB complaints related to standards of care, professional incompetence, unprofessional conduct which may endanger the public, and inability to practice medicine by reason of mental or physical impairment. Seldom were issues of billing addressed by the TMB.
While the NSA does not create a TMB equivalent agency or entity on the federal level, it allows shared or collaborative enforcement between the state and federal governments. For example, the TMB could investigate and proscribe remedial action for violations of the NSA, and the federal government can impose a civil monetary penalty concurrently, based on the TMB’s finding of a violation. It is anticipated that TMB investigations related to billing practices under SB 1264 and the NSA will increase as leniency slackens the longer applicable legislation is in effect.
Violations of state and federal billing law differ from the historical disciplinary actions in that, although few providers are responsible for their own billing, providers are considered the responsible parties if violations occur. Because adverse Board findings can negatively impact providers, is it of the utmost importance that providers take a more active role in ensuring that those who bill on their behalf fully comply with applicable state and federal laws.
Providers should be familiar with the following compliance points and discuss them with those responsible for their billing:
The NSA, though still in its infancy, already has been the basis for TMB and other provider board investigations and disciplinary actions. As medical boards in both Texas and the nation grow more familiar with the requirements of both state and federal law, actions based on billing practices will likely increase. To avoid adverse action related to billing practices, providers should familiarize themselves with their obligations under both state and federal legislative frameworks and take affirmative steps to ensure they fully comply with these laws.
 Loren Adler, Paul B. Ginsburg, Mark Hall, Erin Trish, "Analyzing New Bipartisan Federal Legislation Limiting Surprise Medical Bills," Health Affairs Blog, September 25, 2018, https://www.healthaffairs.org/do/10.1377/forefront.20180924.442050.
 Texas Senate Bill 1264 was enacted May 25, 2019 with an effective date of September 1, 2019; but, the changes in law made by SB 1264 apply only to services provided on or after January 1, 2020.
 No Surprises Act, Pub. L. No. 116-260, 134 Stat. 2758, 2020.
 The NSA does not apply to federally directed health plans such as Medicare, Medicaid, and Tricare.
 The Centers for Medicare and Medicaid Services is the agency tasked with levying monetary penalties against providers and facilities that violate the NSA.