New Texas Medical Billing Requirements Can Leave Hospitals and Other Health Care Facilities Unable to Collect for Services Provided

Starting September 1, 2023, health care facilities in Texas will have to make changes to their billing practices to comply with a newly passed law requiring greater transparency in medical billing as a result of Texas Governor Greg Abbott signing Senate Bill 490 into effect. In an effort to increase billing transparency to prevent patients from receiving a single “balance due” bill that fails to detail all services and supplies provided, health care providers will now have to send itemized bills.

Who Must Comply? 

Under Texas law, a “health care provider” is defined as a facility licensed, certified, or otherwise authorized to provide health care services or supplies in Texas during the ordinary course of business. Specifically, this includes hospitals but does not include federally qualified health centers, physician practices or individual providers.

What Is Required under the Law? 

A health care provider that requests payment from a patient after providing a health care service or related supply shall provide a written, itemized bill sufficiently describing the cost of each service and supply provided to the patient. This itemized bill must be submitted within 30 days after the provider receives a final payment on the provided service or supply from a third party, including payors. The itemized bill may be submitted to the patient in writing, or electronically through a patient portal on the provider’s website. Further, the provider must provide this bill on request at any time following the issuance of the original itemized bill.

What Must the Itemized Bill Include? 

The itemized bill must include:

1. A plain language description of the supplies and services provided to the patient;
2. If the provider sought or is seeking reimbursement, they must provide any billing code submitted to the third party. They must also share the amounts billed to and paid by that third party; and
3. The amount that the provider alleges is due from the patient for each supply and service provided to the patient.

What Are the Penalties for Failing to Issue an Itemized Bill? 

This new law includes penalties for non-compliance, including the potential to forfeit payment and licensure violations. Specifically, health care providers are prohibited from collecting on a debt for the provided health care supply or service, if they have first not complied with the itemized bill requirements set out by SB490. Further, the law gives the appropriate licensing authority the power to take disciplinary actions against the provider for the violation of SB490 as if the provider violated the applicable licensing law.