TDI releases report on PPO out-of-network payments
The Texas Department of Insurance today released the results
of a survey that looked at out-of-network payments by preferred provider organizations
(PPOs) for certain services. The survey found that most plans comply with the
state requirement to pay such claims “at the usual or customary charge for the
service.”
TDI surveyed insurers about their initial payments to
out-of-network providers for certain types of emergency services claims in five
urban areas of the state. The results showed that most insurers’ payments were
based on billed charges, as determined by one data source, FAIR Health,
Inc.
However, for each type of claim, TDI also noted a few outliers
whose initial payment appeared to be based on something other than billed
charges. The agency will be contacting those insurers for more information. Insurers not in compliance with TDI’s
reimbursement rules should immediately begin corrective actions.
The survey looked only
at PPO services because consumers in those plans may be balance billed even for
emergency services – meaning the consumer may be responsible for the amount not
paid by the plan. Consumers in a health maintenance organization (HMO) plan or exclusive
provider organization (EPO) plan who get emergency care from an out-of-network provider
in an emergency situation aren’t responsible for amounts above their normal
co-pays and coinsurance for in-network care.
Under Texas law, consumers with health plans
regulated by TDI can request mediation for balance bills that exceed $500 for
care provided at an in-network hospital. Balance billing occurs when an
out-of-network physician seeks payment from the patient for more than what is covered
by the patient's insurance.
TDI regulates fully insured health plans – or
those where the insurance company or HMO assumes the total risk for paying
claims. Fully insured plans cover about
20 percent of Texans with health insurance.
Read the survey
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