Texas IDR Arbitration For Medical Revenue Recovery

The Texas Surprise Billing Law (SBL), effective January 1, 2020, is codified in Texas Insurance Code (TIC) Chapter 1467 and governed by rules under 28 TAC Chapter 21, Subchapter PP. This law outlines the resolution processes and reimbursement standards for out-of-network (OON) medical services, protecting patients from surprise medical bills.

Key Provisions of the Texas SBL

1. Arbitration and Mediation Processes:
   • Arbitration (for medical practitioners):
     • Must be initiated within 20 to 90 days from the date of receipt of the original Explanation of Benefits (EOB).
   • Mediation (for facilities):
     • Non-binding mediation is required for disputes. If mediation fails, parties may pursue civil judicial action.
2. Reimbursement Standards:
   • For emergency care and inadvertent treatment, reimbursement is tied to the Usual, Customary, and Reasonable (UCR) rates.
   • Arbitrators consider several factors, including:
     • The complexity of the case.
     • The provider’s expertise.
     • Data from benchmark databases (e.g., 80th percentile charge data or 50th percentile “allowed” data).

Scope of Application

The Texas SBL applies to OON reimbursement for:

• Emergency services provided in hospital emergency rooms or licensed free-standing emergency rooms.
• Services provided by OON facility-based providers at in-network facilities.
• OON diagnostic imaging or laboratory services connected to in-network care.
• Fully insured commercial health plans, including PPOs, EPOs, HMOs, as regulated by the Texas Department of Insurance.
• Texas state employee and retiree plans, including plans for active and retired teachers.

State and Federal Coordination

1. Specified State Laws:
   • Texas Insurance Code (TIC) Chapter 1467 and associated rules are designated as the governing state laws for OON rate determinations in applicable cases.
2. Independent Dispute Resolution (IDR) Processes:
   • Texas employs two separate IDR processes:
     • Mediation: For OON disputes involving facilities, governed by TIC Chapter 1467, Subchapter B, and Division 2 of 28 TAC Chapter 21, Subchapter PP.
     • Arbitration: For OON disputes involving non-facility providers, governed by TIC Chapter 1467, Subchapter B-1, and Division 3 of 28 TAC Chapter 21, Subchapter PP.
3. Federal IDR Process:
   • For cases outside the scope of the Texas SBL, such as disputes involving nonparticipating air ambulance providers, the federal IDR process under Section 2799A-2(b) of the Public Health Service (PHS) Act and 45 CFR 149.520 applies.

CMS Clarifications

In a letter from CMS to the Governor of Texas (January 25, 2022), CMS clarified the following:

1. No All-Payer Model Agreement:
   • Texas does not have an All-Payer Model Agreement to determine OON rates.
2. State vs. Federal Jurisdiction:
   • The Texas SBL applies to emergency and nonemergency OON care in cases involving state-regulated health plans.
   • The federal IDR process governs air ambulance services and other situations excluded from the Texas SBL.

Conclusion

The Texas SBL provides robust protections against surprise medical bills, offering clear guidelines for dispute resolution and reimbursement while coordinating effectively with federal processes for excluded services.