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.

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