Imagine visiting the emergency room, getting treated, and later receiving a bill for thousands because your provider was out-of-network. That’s surprise medical bills: a frustrating scenario for patients and a complicated challenge for medical practices navigating payments and disputes.
To address this, Texas passed Senate Bill 1264 in 2019, followed by the federal No Surprises Act in 2022. Both laws protect patients from balance billing but also change how providers handle payments, negotiations, and arbitration with insurers.
In this blog, we’ll explore how Texas’s surprise billing protections affect medical practices financially, operationally, and legally, and share strategies to help you stay compliant, protect revenue, and simplify your billing process.
Stay Compliant and Profitable Before Fines Catch Up
Understanding Surprise Billing in Texas
Surprise medical bills, or balance billing, happen when patients receive care from out-of-network providers and later get billed for what insurance doesn’t cover. It often occurs in emergencies or when patients unknowingly see out-of-network specialists like anesthesiologists or radiologists.
Texas took an early stand on this issue by passing Senate Bill 1264 (SB 1264) in 2019, making it one of the first states in the nation to adopt protections against surprise billing. The law placed limits on what providers can bill patients directly, shifting the dispute over payment to providers and insurers instead of leaving patients stuck in the middle.
While the federal No Surprises Act, effective in 2022, expanded these protections nationwide, but with some key differences:
- Texas SB 1264 applies to state-regulated health plans, such as fully insured plans and many HMOs.
- The federal No Surprises Act applies to self-funded employer health plans, which cover a large portion of Texans, as well as federally regulated plans.
- In some cases, both laws may apply, and providers must understand which rules govern the claim in question.
- Arbitration and dispute resolution processes differ slightly between state and federal regulations, adding another layer of complexity for practices.
For healthcare providers, these overlapping rules can create confusion. Staying compliant while also safeguarding revenue requires careful navigation of Texas medical billing regulations, especially when disputes with insurers arise.
Key Provisions of the Texas Surprise Billing Law
The Texas Surprise Billing law, SB 1264, was designed to protect patients from unexpected costs while setting clear responsibilities for providers and insurers. For practices, knowing these rules is essential to staying compliant and protecting revenue.
Providers most affected include:
- Emergency room physicians
- Radiologists and pathologists
- Anesthesiologists
- Assistant surgeons and other hospital-based specialists
Covered services:
- Emergency care: Patients cannot be balance billed, even if providers are out-of-network.
- Certain non-emergency services: The same applies when out-of-network specialists treat patients at in-network facilities.
Dispute resolution:
- Providers must work directly with insurers instead of billing patients.
- Payment disagreements go through arbitration or mediation, keeping patients out of the middle.
Patient protections:
- No balance billing in these cases.
- Patients only pay normal in-network cost-sharing amounts.
By shifting disputes away from patients, Texas has created a fairer system; though it also brings new compliance and reimbursement challenges for practices.
How These Provisions Impact Medical Practices
While SB 1264 was designed with patients in mind, it has created new realities for medical practices. These changes affect how providers handle payments, manage paperwork, and maintain cash flow. Understanding these impacts, along with the broader requirements of the No Surprises Act Texas regulations, can help practices adapt and avoid financial strain.
Financial impact:
- Loss of balance billing means that some providers face reduced revenue, especially those who heavily rely on out-of-network payments.
- Practices are now more dependent on insurers, with reimbursements tied to negotiations or arbitration rather than direct patient billing.
Administrative burden:
- Filing disputes, managing arbitration, and tracking outcomes require more staff time and resources.
- Accurate coding and billing have become even more critical since errors can complicate disputes and delay payments.
Cash flow implications:
- Arbitration often takes time, resulting in delayed reimbursements that strain day-to-day operations.
- If payments from insurers fall short, practices may be forced to accept partial reimbursement or write off balances.
For many Texas providers, these protections have reshaped the revenue cycle. Instead of billing patients directly, practices must invest more effort in insurer negotiations, detailed documentation, and streamlined billing processes to keep cash flow steady.
Compliance Challenges for Practices
Beyond financial strain, Texas’s surprise billing laws create new compliance demands. Practices must carefully follow both state and federal rules to avoid costly mistakes.
Key challenges include:
- Patient notifications: Clear disclosures are required so patients know their rights and cost-sharing responsibilities.
- State vs. federal rules: Practices must determine which law applies in each case to remain compliant.
- Billing accuracy: Incorrect coding or claims can lead to disputes and reduced reimbursements.
- Training and systems: Staff require ongoing education, and billing systems must be regularly updated to meet current requirements.
Strategies for Medical Practices to Adapt
Navigating surprise billing laws may feel overwhelming, but there are practical ways for providers to ease the burden. By adjusting processes and leaning on the right partners, practices can stay compliant, protect revenue, and maintain patient trust.
Practical strategies include:
- Partner with experts. A billing company like 5 Star Billing Services can manage disputes, streamline claims, and keep practices compliant.
- Improve payer contracts. Stronger negotiations reduce reimbursement shortfalls.
- Use data analytics. Tracking outcomes helps refine billing practices and improve negotiations.
- Educate patients. Clear communication about coverage and costs builds trust and prevents confusion.
With these strategies, practices can manage compliance more smoothly and maintain financial stability.
The Role of 5 Star Billing Services in Navigating Surprise Billing Laws
Texas’s surprise billing laws can put medical practices in a tough spot, but you don’t have to face these challenges alone. Here’s how common hurdles play out and how our team can help turn them into manageable solutions.
- Staying compliant with complex state and federal billing regulations.
How we can help: We ensure your billing practices meet all legal requirements, reducing the risk of errors or penalties.
- Managing arbitration and payer disputes can be time-consuming and confusing.
How we can help: We handle negotiations and arbitration filings efficiently, letting your staff focus on patient care.
- Administrative overload from increased paperwork, claim tracking, and dispute management.
How we can help: Our team streamlines processes, freeing up your staff’s time and resources.
- Protecting revenue when reimbursements may be delayed or reduced.
How we can help: We optimize claim submissions to maximize reimbursements and maintain steady cash flow.
Grow Your Practice with the Right Billing Partner
Texas Surprise Billing Protections may put limits on balance billing, but they don’t have to put limits on your practice’s success. With 5 Star Billing Services by your side, you get more than just billing support. You get a partner who keeps compliance simple, takes the stress out of arbitration, lightens your administrative load, and safeguards your revenue cycle. We make it easier for your practice to adapt without sacrificing financial stability.
Don’t let changing billing laws become a distraction. Team up with our team today and stay focused on caring for your patients while we handle the billing challenges for you.
Start Securing Your Revenue Cycle Today
Frequently Asked Questions
| 1. How does arbitration in Texas differ from the federal process? |
| Texas uses a state-run mediation/arbitration system for applicable plans, while the federal government oversees IDR (Independent Dispute Resolution). Practices must know which process to use depending on the patient’s insurance plan. |
| 2. Can practices negotiate directly with insurers before going to arbitration? |
| Yes. In fact, direct negotiation is encouraged to save time and reduce costs. A billing partner like 5 Star Billing Services can help prepare the strongest case during negotiations. |
| 3. What financial risks do practices face if they ignore compliance requirements? |
| Penalties can include denied claims, fines, and even reputational damage. Over time, noncompliance can also weaken payer relationships and hurt long-term revenue. |
| 4. How do these laws impact ancillary providers like pathologists or anesthesiologists? |
| These specialists are often out-of-network even when patients visit in-network hospitals, so the protections significantly affect how their services are billed and reimbursed. |