EDITORIAL
TEXAS SB 1264 GOOD TO GREAT
PROTECTING PATIENTS AND KEEPING TEXANS IN CONTROL OF THEIR HEALTHCARE
Texas Senate Bill 1264,
enacted January 1,
2020, established the
Texas Department
of Insurance Independent
Dispute Resolution
(TDI IDR) program, which has
addressed a portion of health
plan network inadequacy and
protected a large number
of Texas patients who are
enrolled in state-regulated
plans. It has also provided
benefits and protections to
Texas patients enrolled in ACA
exchange plans. However,
even with a large number of
Texas patients protected, and
a path for physician practices
to enter into a 10-factor baseball
style arbitration process,
there is still a massive gap that
leaves other Texas patients
vulnerable.
Texans who are not protected
include Texas state
or city employees enrolled
in ERISA plans, out-of-state
health plans, University of
Texas plans, Texas A&M plans,
self-funded and self-regulated
non-ERISA municipality
risk pools, and self-funded non-ERISA school
district plans. There are important steps that
need to be taken in order to ensure a level
playing field between the physician practices
and these health plans/risk pools administered
by health plans.
Health plans have the upper hand in
arbitration with seemingly unlimited budgets
for legal teams and departments exclusively
dedicated to arbitration. This creates
an uphill battle for small- to intermediatesized
physician practices that may not have
access to health insurance networks or
the resources to contest these challenges.
That being said, even some of the large
Texas hospital and physician practices have
been forced out of network over the past
two years. This David and Goliath scenario
acknowledges that it is usually the Goliath
health plans that win, which has resulted in
unconscionable profits, increasing premiums,
and gross enrichment during the past few
years.
Yet, there is more hope and stability in the
TDI IDR system that is designed and managed
by Texans for Texans, than the federal
No Surprises Act (NSA) equivalent, which went
into effect January 1, 2022. While the federal
NSA does protect the patient from balance
bills and in theory should include the Texas
state and city employee groups listed in the
gap above, it takes Texas healthcare out of
the hands of Texans and places it into the
hands of the federal government.
One significant deficit of the NSA is that it
gives even greater advantage in the sevenpoint
federal arbitration process to the
health plans by utilizing median payment
rates/Qualifying Payment Amounts (QPAs),
which are provided by the health plans.
Health plans have historically utilized highly
questionable database sources for establishing
median rates, some of which have led to
settlements and litigation and the creation of
FAIR Health (fairhealth.org). FAIR Health is an
independent nonprofit that collects data for
and manages the nation’s largest database
of privately billed health insurance claims
and is entrusted with Medicare Parts A, B, and
D claims data for 2013 to the present. Preliminary
QPA data in Texas have shown rates
between 5% and 20% of the 50th percentile
of FAIR Health per geozip provided by the
health plans in the open period of the NSA
federal IDR process.
This is in contrast to the Texas TDI IDR
system that uses FAIR Health to provide the
guardrails for both parties to submit their
best and final offers. In addition, the TDI IDR
system is far superior to the NSA because
of the option for litigation following IDR, if
necessary. Further, the TDI IDR currently has
a functional portal that allows selection of
arbitrators and entry of offers by the health
plan, whereas the NSA portal is not functional
despite having an initial projected go-live
date of February 28, 2022, which was postponed
by CMS to 15 days following the portal
opening.
There are several significant problems
with the TDI IDR process that require solutions.
First and foremost, S.B. 1264 was an
unfunded mandate on the Texas Department
of Insurance (TDI). TDI received no additional
resources or manpower to run the IDR system,
which will create substantial continuity
problems over time. Additionally, the TDI IDR
team is separate from the TDI Enforcement
Division. Both need additional resources. On
the enforcement side, there is a greater need
to hold health plans accountable when they
conduct bad faith acts as defined by law
and insurance code during the IDR process.
Without additional measures, this forces
By Christopher Cook, DO
26 | DALLAS MEDICAL JOURNAL • May 2022