TDI Interventions Yield Payments to Health Care Providers and Policyholders

By a News Reporter-Staff News Editor at Insurance Weekly News -- - The Texas Association of Freestanding Emergency Centers (TAFEC) is releasing a recent analysis of complaints made to the Texas Department of Insurance (TDI) on behalf of out-of-network health care providers that demonstrates how chronic and abusive underpayment by insurance companies is the primary cause of surprise medical bills for patients.

In the fall of 2016, a third-party billing company acting on behalf of freestanding emergency centers filed complaints alleging that insurers ignored their legal obligations to pay all or part of claims for reimbursement submitted on behalf of policyholders for services rendered at the centers, and requested TDI's intervention. The billing company filed so many complaints that the agency's resources were overwhelmed and the company began holding complaints until those that had been filed were resolved.

After reviewing only 417 total claims, TDI outlined the findings of their analysis in a letter dated January 26, 2017. TDI determined that an additional $457,000 was paid to the freestanding emergency centers as a result of the complaints covering that limited period. That amounts to $1,096 per claim owed by the insurance companies to providers and their patients.

Based on this small sample of complaints, it is clear that many millions of dollars are being wrongfully withheld from health care providers that treat patients who have a right to expect that their medical bills will be paid on time and in the amounts required by the insurance contracts and Texas law.

The same analysis by TDI included data pertaining to a second process for resolving complaints: mediation. The results are astounding. From 2009-2016, TDI received 3,824 patient-initiated mediation requests.

After TDI's intervention, 3,400 (90 percent) of those complaints were resolved through informal settlement teleconferences between the provider and the health plan, without ever having to be submitted to the State Office of Administrative Hearings for formal mediation. TDI's data shows that each of the 3,400 cases involved underpayments by health insurance companies and resulted in additional funds paid to providers.

Furthermore, since 2015, when the agency began tracking additional payments that resulted from patients requesting TDI to intervene with mediation, more than $750,000 was paid to providers on behalf of their patients due to underpayments by insurance companies. When broken down by year, TDI's report showed that insurance companies paid on average $375,000 per year to providers and/or patients.

If TDI tracked mediation-related payments dating back to 2009 when the agency began receiving mediation requests, it would likely have found that insurance companies owed some $3,000,000 in payments to providers and/or patients from chronic underpayments, assuming annual average underpayments of $375,000. Again, this number pertains solely to mediation, meaning patients who knew about the mediation option and followed through to request it.

Brad Shields, executive director of TAFEC, was not surprised by TDI's findings. "TDI's complaint and mediation processes are working, but more needs to be done to stop insurers' chronic and abusive practices of underpaying valid claims. TDI's data show the tip of an iceberg that TAFEC members have been aware of for some time. Chronic underpayment by insurance companies is rampant and ongoing, and it's causing out-of-network providers to bill patients whose insurers should be paying."

The data outlined by TDI indicates a systematic attempt by multiple insurance companies to reduce payments to providers and shift costs to patients. This intentional underpayment by insurance companies to providers is part of a business model to "deny, delay and reduce." When insurance companies collect premiums without paying patient claims on time and in full, they are more profitable.

This must be addressed by establishing guidelines for "usual and customary" reimbursement, increasing oversight to hold insurance companies accountable to meet this standard, and enforcing civil and regulatory penalties when insurance companies do not obey the law to change their behavior and protect Texas consumers.

Keywords for this news article include: Legal Issues, Texas Association of Freestanding Emergency Centers.

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