In an unusual enforcement action against an insurer for out-of-network billing, Humana will pay Texas a $700,000 fine for failing to maintain an adequate number of in-network anesthesiologists at its contracted hospitals in four counties.
It's the latest development in a running national battle over surprise out-of-network bills, which a bipartisan group of U.S. senators recently targeted with draft legislation. The problem is particularly pronounced in Texas, which lacks a comprehensive system for shielding patients from contract disputes between insurers and providers, unlike California and other large states.
Earlier this week, Texas Insurance Commissioner Kent Sullivan announced he was fining Humana because its commercial PPO and HMO plans had no in-network anesthesiologists at 23 contracted facilities during certain periods in 2018 following four contract terminations.
That led to patients in the Dallas, Houston, Austin and San Antonio areas receiving out-of-network bills for anesthesiology services. When Humana enrollees contacted the insurer about the balance bills, Humana directed them to pursue mediation under state law and did not offer them assistance, according to consent orders signed by Humana.
Humana has agreed to hold enrollees responsible only for the in-network charges and not for the balance bills.
"Protecting consumers from balance bills was a priority in this case," Sullivan said in a written statement. "Texas has strict network adequacy standards, and we're going to hold insurers accountable for meeting them."
A Humana spokeswoman said her company has finalized negotiations with a network of surgical anesthesiologists to provide members with adequate access to in-network providers and prevent them from being balance billed.
Stacey Pogue, a senior policy analyst at the Austin-based Center for Public Policy Priorities, who tracks the issue of surprise out-of-network bills, called the fine against Humana an important step that will send a warning shot to Texas insurers about maintaining network adequacy.
Having the state enforce network adequacy standards will bring pressure during contract negotiations between insurers and providers to include large physician groups in networks, Pogue said.
But it still won't fully protect consumers from surprise bills, she added. "You can have an adequate network and still get surprise bills," she said. "They are distinct problems with distinct solutions."
Texas has lagged in addressing the surprise out-of-network billing issue after becoming one of the first states to establish a mediation system for resolving these billing disputes in 2009.
Some Texas lawmakers have proposed legislation to require insurers and providers to resolve out-of-network bills while shielding consumers, similar to laws in California, Florida, New York and other states. But those efforts have failed so far.
Even the limited mediation system Texas offers is cumbersome and hard to access, according to a Center for Public Policy Priorities report Pogue wrote last year. Just 3,824 people have used it since 2009, compared with an estimated 250,000 Texans who receive a surprise, out-of-network during a typical two-year period.
She found that Humana, Blue Cross and Blue Shield of Texas and UnitedHealth Group lacked in-network physicians at a significant percentage of their contracted hospitals in Texas. More than 300 Texas hospitals did not have a single emergency physician who was in-network with at least one of those three major carriers.
For Humana, which had the highest percentages of hospitals without any in-network specialists, 63% of its contracted hospitals lacked emergency physicians, 42% lacked anesthesiologists, 33% lacked radiologists, 22% lacked for pathologists, and 19% lacked neonatologists, according to the report.
To protect consumers from out-of-network bills, a bipartisan group of six senators, led by Sen. Bill Cassidy (R-La.), recently offered a draft bill that would address out-of-network charges for emergency and non-emergency care in both fully insured and self-insured plans.
Under that proposal, patients would only be responsible for their plan's in-network costs. Plans would pay out-of-network providers the greater of the median in-network fee or 125% of the average allowed amount.