Out-of-network billing used to be simple. A practice sent the claim, the plan paid what it chose to pay, and the patient got a bill for the rest. For many Texas practices that is no longer how it works. Texas state law and the federal No Surprises Act now limit when a patient can be billed beyond their in-network cost share, and they set up ways for providers and plans to settle payment disagreements.
This article gives a plain overview of how the two sets of rules fit together and what they mean for day-to-day billing. It is general information, not legal advice. The details depend on the patient’s plan, the setting and the type of service, so check current guidance from the Texas Department of Insurance and federal regulators, or talk with a healthcare attorney, before you change your policies.
What surprise billing means
A surprise bill usually happens when a patient gets care from a provider who is out of network without having chosen that provider. Common examples:
- Emergency care, where the patient has no real chance to pick an in-network facility or physician.
- Care at an in-network hospital or surgery center from an out-of-network provider, such as an anesthesiologist, radiologist, pathologist or assistant surgeon.
- Lab or imaging work sent to an out-of-network provider without the patient knowing.
Balance billing is the practice of billing the patient for the difference between the provider’s charge and what the plan paid. Surprise billing laws mainly target balance billing in these situations.
The two layers: Texas law and federal law
Texas practices deal with two overlapping sets of rules.
Texas state rules
Texas has its own surprise billing protections. They cover plans regulated by the state, such as fully insured HMO, EPO and PPO plans overseen by the Texas Department of Insurance. In covered situations, out-of-network providers generally may not balance bill the patient. The patient pays only their in-network cost share, such as a copay, coinsurance or deductible.
The Texas rules also set out how payment disputes between out-of-network providers and plans get resolved, through state-run mediation or arbitration depending on the type of provider and claim. The provider takes payment issues up with the plan rather than with the patient.
The federal No Surprises Act
The No Surprises Act is a federal law that gives similar protections nationwide. It reaches many plans that state law cannot, especially self-funded employer plans, which are generally governed by federal law rather than state insurance rules. It covers in broad terms:
- Emergency services, including out-of-network emergency care.
- Non-emergency services by out-of-network providers at in-network facilities, in certain circumstances.
- Air ambulance services.
In protected situations the patient’s cost share is based on in-network amounts, and the provider generally cannot balance bill. Payment disputes between providers and plans go through a federal open negotiation period and, if that fails, a federal independent dispute resolution process.
The federal law also requires Good Faith Estimates for uninsured and self-pay patients, plus notice requirements and patient protections that apply to many providers.
Which rule applies?
The key question is what kind of plan the patient has and whether Texas law applies to that plan and situation.
- State-regulated plans: Texas protections and Texas dispute processes generally apply where the state law covers the situation.
- Self-funded employer plans and other federally governed plans: the No Surprises Act and the federal dispute process generally apply.
- Gaps: where state law does not cover a situation, the federal rules may fill in.
In practice, your front desk and billing team need to know the plan type before the claim goes out, because it decides which protections apply and where a payment dispute goes.
What this means for your practice
Know your network status, and your facilities’
Many surprise billing problems start when a provider is out of network at a facility that is in network. If your physicians work at hospitals or surgery centers, keep a clear record of which plans you are contracted with and which plans those facilities accept. Gaps in network participation can leave you with claims you cannot balance bill and must resolve with the payer instead.
This is one reason credentialing matters so much. Billing Benefit offers credentialing and network participation, state licensing and regulatory compliance, and ongoing credentialing maintenance. You can read more about payer enrollment and facility credentialing.
Verify the plan type up front
Before the visit, find out:
- Whether the patient’s plan is state-regulated or self-funded.
- Whether your providers are in or out of network for that plan.
- Whether the service is emergency or non-emergency, and where it will take place.
Getting this right at intake makes it much easier to bill the right amount and to know which dispute path you would use if payment falls short.
Handle notice and consent carefully
For some non-emergency services, federal rules allow certain out-of-network providers to ask a patient to waive surprise billing protections through a specific notice and consent process. This option has strict limits. It is generally not available for emergency care or for certain ancillary services such as anesthesia, radiology, pathology and lab work at in-network facilities. If your practice uses notice and consent, make sure the forms, timing and documentation follow current federal requirements.
Give Good Faith Estimates to uninsured and self-pay patients
Uninsured and self-pay patients are generally entitled to a Good Faith Estimate of expected charges for scheduled care, and in many cases when they ask for one. Build this into scheduling so estimates go out in time, and keep copies. If the final bill is much higher than the estimate, the patient may be able to dispute it.
Bill the patient only their in-network cost share
When a claim falls under surprise billing protections, the patient statement should reflect only their in-network cost share. Train your billing and collections staff to spot these claims so balance bills do not go out by mistake. Fixing an incorrect patient bill after the fact costs time and can hurt patient trust.
Track out-of-network payments and disputes
When a plan’s out-of-network payment seems low, the next step is with the plan, not the patient. Depending on the plan, that means the Texas mediation or arbitration process or the federal negotiation and independent dispute resolution process. Each has its own deadlines and paperwork. A practice that does not track these claims closely can miss its window.
Good follow-up habits help here:
- Flag out-of-network claims as soon as payment posts.
- Compare the payment with your expectations and note any shortfall.
- Record the plan type and which dispute process applies.
- Keep remittance advice, correspondence and dates in one place.
The same discipline that drives denial management applies to out-of-network disputes: catch problems early, document everything and follow up on time.
Where a billing partner fits
Surprise billing rules add work across the revenue cycle, from intake and coding to payment posting and patient statements. Billing Benefit is a medical billing company in Sugar Land, Texas, near Houston, working with practices across Greater Houston, Texas and the rest of the US. Its medical billing and coding services include charge capture and coding, claim submission and follow-up, payment posting and denial management, and patient billing and collections.
Billing Benefit also offers medical billing audits that include a comprehensive billing review, recovery of lost revenue, and preventative strategies and education. An audit can help a practice see whether out-of-network claims are being identified, billed and followed up correctly. Clients also receive a range of reports at the end of each month, including account activity and aging, which can help you keep an eye on unresolved claims. For help with older balances, see accounts receivable and denial claim management.
Next steps
Surprise billing rules protect patients, but they also change how practices get paid for out-of-network care. Start by reviewing your network participation, your intake process for plan type and the way your team handles patient statements and payment disputes.
If you would like to talk through your practice’s billing, you can book a free consultation with Billing Benefit, call (832) 674-1900 or email info@billingbenefit.com. Office hours are Monday to Friday, 9 AM to 5 PM Central. You can also learn more on the Billing Benefit home page.
Written with AI help and checked by Billing Benefit.
