What the Texas Itemized Bill Law Means for Physician Billing Services

“As goes Texas, so goes the nation”. This saying is something anyone responsible for physician billing services should keep in mind when considering the impact of the Texas Medical Billing law. While the bill targets “healthcare facilities”, providers at all levels should pay attention – this type of legislation signals a shift in demands around the patient experience, which can easily influence the entire provider community.

The law ultimately puts providers under increasing pressure to optimize the efficiency of their billing processes, possibly incorporating the use of physician billing companies to quickly comply with new emerging standards. Revenue cycle leaders in states across the country will benefit from understanding the bill and the steps they can take to get ahead of similar legislation and sentiments in their home territory.

Texas Senate Bill 490 was signed into law in May of 2023 and took effect on September 1. It requires that patients be provided an itemized bill when they’re billed for medical services. Here’s how the bill plays out [1]:

• Patients must be provided with an itemized bill, which can be either electronic or paper, outlining the cost of all services and supplies used during the provider visit.
• The provider must submit the itemized bill to the patient within 30 days after the final payment is received from insurance carriers for any services or supplies.
• Descriptions must use plain language for each distinct service or supply that was provided.
• Bills must include all charges and billing codes that were submitted to a third party as well as the corresponding reimbursement from that third party.
• The bill must include a calculation of the amount the provider claims is due from the patient for each supply or service provided.

An additional requirement from the legislation is what has so much potential to change patient expectations of provider billing practices – the bill entitles patients to receive an updated itemized bill by request at any time. Providers also will not be allowed to pursue debt collection against a patient for any service or supply unless they’ve met the requirements of the bill. 

The law allows for disciplinary actions against offenders, pushing providers to work with vendors to implement the system changes needed to create statements with all the required data points. It is also recommended that providers review their patient portals to decide whether it can be used to send itemized bills since this is allowed under the law. Providers will also be responsible for occasional testing to verify that the proper data is being included in the itemized bill, and also that the information is readable and understandable by patients. 

This bill does also create some complexity around patient liability. It doesn’t prohibit pre-service or time of service payments, which means portions are collected without sending an invoice. However, if insurance determines that liability is greater than what was collected, this must also be reflected in the itemized statement. This requirement means that providers will need to review their patient scheduling and registration processes for accuracy of estimations and pre-service and time of service payment policies if they would like to collect greater portions of liability before or at the time of service.

Anyone in charge of physician billing services should read these changes as a shift not just in legislation, but in the expectations of patients. They should be proactive in getting in front of this change, even if legislation isn’t immediately pending in their state. Here are a few tips to move forward in your physician billing services and provider itemized bills that improve the patient experience. 

Evaluate Current Practices in Physician Billing Services

Most importantly, look at your current practices. You’ll be looking at questions such as how often patients are requesting itemized bills now, or how often they’re confused about what they’re being sent. This could be the bills themselves or even simply the language used. You’ll want to look for opportunities in your processes to better inform patients and help them best understand their obligations. If you see any glaring holes, you should consider looking into physician billing companies. 

Look at Staffing

Helping patients better understand their bills will require a review of your staffing. More detailed bills not only require changes in how your billers work, but could also result in increased demands on office staff in handling calls from patients with questions. This could be an opportunity to contact physician billing companies to see who can help you evaluate and estimate your staffing needs. 

Decide on Your Metrics

The right metrics will be critical in determining whether your efforts to improve the patient experience through more detailed and informative billing are effective. Keep a close eye on cash flows and collections, as well as self-pay KPIs where applicable. You’ll also need to monitor metrics around data governance and data quality.

Consider Outsourcing Physician Billing Services

Many providers will find that the easiest way to get ahead of this trend in itemized billing is to work with physician billing companies. These services can provide you with access to a better and more consistent billing experience for your patients without the pressures of disrupting your in-house team. 

To learn how you can get started on that process today, contact us here.