Texas State Senator Wants Insurance Commissioner Replaced

Texas State Senator Wants Insurance Commissioner Replaced
September 21, 2012

Texas State Sen. Wendy Davis wants Gov. Rick Perry to replace Insurance Commissioner Eleanor Kitzman, charging she has “shown a clear pattern of disregard for consumer interests in Texas, indifference to the will of the Texas Legislature, and a bias favoring insurance companies rather than the interests of Texas” in the year since she was appointed.

In an August 30 letter to Perry, Davis, a Democrat from Fort Worth, takes particular issue with a decision by Kitzman to delay and change rules governing health insurers’ balance billing disclosures. In December 2011 Kitzman suspended the rulemaking that had been advocated by her predecessor, Mike Geeslin. Davis wrote of the revised rules Kitzman unveiled more recently:

“She eliminated well thought out rules that required health insurance companies to make clear information available to policyholders about in-network providers. This rule would have protected consumers from being charged out-of-network fees by giving them important information about their plans. Without this rule, many Texans will be charged hundreds or thousands of dollars more than they expected because the policyholders will be unaware of when a so-called ‘in-network’ provider utilizes or partners with out-of-network services. The proposed rule blocked by Commissioner Kitzman would also unnecessarily prolong the amount of time it takes doctors to be compensated for their services.”

Balance Billing Issue

Balance billing occurs when a health care provider submits an invoice directly to a patient for services above and beyond the amounts remitted by a health plan (in addition to any deductibles or copayments the patient is expected to pay). It is illegal for health care providers to balance bill for Medicare services, and most states prohibit doctors who have contracts with health plans from seeking reimbursement directly from patients who are members of those plans.

Nonetheless, there are some gaps in the prohibition, particularly for elective or out-of-network services. The Texas rules currently under review would increase consumer protections and disclosures. But Kitzman has proposed some alterations, including abandoning a requirement that insurers disclose holes in their provider networks; striking a requirement that policies spell out which hospitals are “limited” in availability of in-network anesthesiologists and other ancillary services doctors and which are “approved”; and permitting insurers to post information about in-network hospital-based doctors to their Web sites rather than paying for direct mailings.

‘Process Doesn’t Work Well’

The changes were a major focus of discussion in an August 30 hearing of the Senate State Affairs Committee called to discuss an interstate market that would allow Texas consumers to purchase policies sold under other states’ laws. During the hearing, Kitzman defended her department’s approach to the balance billing rules.

“I think that certainly consumers should know up front if there is going to be an out-of-network charge,” Kitzman said at the hearing. “But the process that is in place today doesn’t work well for anyone, and I know from personal experience it is almost impossible to find out what a procedure is going to cost up front.”

R.J Lehmann (rlehmann@rstreet.org) is public affairs director at the R Stree Institute in Washington, DC. Used with permission from restreet.org.