If a restaurant charged one person $10 for a meal and charged another person $40 for the same order, it would be considered price gouging—and rightfully so.
“The future of health care finance is Cash Pay Centric Health Plans in partnership with primary care physicians” – Bill Rusteberg
The bill would amend the Insurance Code to require that a physician or health care provider may not be prohibited from accepting directly from an enrollee full payment for a health care service in lieu of submitting a claim to the enrollee’s health benefit plan.
It has become commonplace in the medical industry to charge select customers vastly higher prices for the same service. While some would rightfully argue that businesses should be able to charge whatever the market will bear, this is taking place in an industry that serves vulnerable customers and that has limited price transparency and limited competition.
It is currently legal for a hospital to accept $1,000 from an insured patient for a procedure while charging $4,000 or more for the same procedure if a person is paying cash or does not have insurance. While most ethically run medical facilities limit this practice, others take advantage of it in a predatory fashion and simply turn their patients over to collection agencies when the customers cannot pay the inflated bills.
If a restaurant charged one person $10 for a meal and charged another person $40 for the same order, it would be considered price gouging—and rightfully so. We do not accept this type of price discrimination in most industries, yet it is the written business plan for many in health care. This price discrimination is ethically wrong, hurts the most vulnerable in our health care system, and should not be allowed.
House Bill 633 seeks to address this issue by requiring that patients paying a hospital directly without using insurance for a health care service provided in the hospital are not charged an amount that is higher than the lowest contracted rate for that service allowable that the hospital has agreed to accept as payment in full as a contracted, preferred, or participating provider of certain health benefit plans.
By: Frank, Harless, Collier H.B. No. 633
Substitute the following for H.B. No. 633:
By: Harless C.S.H.B. No. 633
A BILL TO BE ENTITLED
relating to the method of payment for certain health care provided by a hospital.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1204, Insurance Code, is amended by adding Subchapter G to read as follows:
SUBCHAPTER G. DIRECT PAYMENT OF HOSPITAL
Sec. 1204.301. DEFINITIONS. In this subchapter:
(1) “Enrollee” means an individual who is enrolled in a health benefit plan or otherwise entitled to coverage under a health benefit plan.
(2) “Health benefit plan” means an individual, group, blanket, or franchise insurance policy, a group hospital service contract, or an individual or group subscriber contract or evidence of coverage issued by a health maintenance organization, that provides benefits for health care services. The term does not include:
(A) the state Medicaid program, including the Medicaid managed care program operated under Chapter 533, Government Code;
(B) the child health plan program operated under Chapter 62, Health and Safety Code; or
(C) Medicare benefits.
(3) “Health care service” means a service to diagnose, prevent, alleviate, cure, or heal a human illness or injury that is provided to an individual by a physician or other health care provider.
(4) “Hospital” means a public or private institution licensed under Chapter 241, Health and Safety Code. The term does not include an ambulatory surgical center licensed under Chapter 243, Health and Safety Code.
Sec. 1204.302. APPLICABILITY TO CERTAIN PLANS. In addition to the health benefit plans described by Section 1204.301, notwithstanding any other law, this subchapter applies to:
(1) a basic coverage plan under Chapter 1551;
(2) a basic plan under Chapter 1575;
(3) a primary care coverage plan under Chapter 1579; and
(4) a plan providing basic coverage under Chapter 1601.
Sec. 1204.303. PAYMENT IN LIEU OF CLAIM FOR BENEFITS; OTHER DIRECT PAYMENTS. (a) At the request of a patient, including a patient who is an enrollee, and subject to Subsection (b), a hospital must accept directly from the patient full payment for a health care service provided in the hospital. If the payment is made by an enrollee, the hospital must accept that payment in lieu of submitting a claim to the enrollee’s health benefit plan.
(b) A request under Subsection (a) must be made not later than the 60th day after the date on which the health care service is provided.
(c) Notwithstanding Section 552.003 or any other law, the amount of the payment for a health care service for which a hospital accepts payment as described by Subsection (a)023 for a service provided in the hospital may not exceed the lowest contracted rate for the health care service that the hospital has agreed to accept as payment in full as a contracted, preferred, or participating provider of a health benefit plan.
SECTION 2. This Act takes effect September 1, 2023