Paxton, 102020 TXAGO, AGO RQ-0385-KP

• Case Date: October 20, 2020
• Court: Texas

Honorable Ken Paxton AGO RQ-0385-KP No. RQ-0385-KP Texas Attorney General Opinion October 20, 2020          Honorable Ken Paxton          Texas Attorney General          300 W. 15^th St.          Austin, TX 78701          Opinion.committee(¾aog.texas.gov          RE: Request for Opinion regarding Section 20.05 of the Texas Business and Commerce Code and its application to self-funded health insurance plans.          Dear Mr. Paxton and Opinion Committee:          This letter serves as a formal request for your opinion regarding the application of Section 20.05 of the Texas Business and Commerce Code to self-funded health insurance plans.          In July of 2019, Senate Bill 1037 was enacted by the Texas State Legislature (see attached) and specifically provides:          "...SECTION 1. Section 20.05, Business & Commerce Code, is amended by amending subsection (a) and adding Subsection (d) to read as follows:          (a) Except as provided by Subsection (b), a consumer reporting agency may not furnish a consumer report containing information related to:          (5) a collection account with a medical industry code, if the consumer was covered by a health benefit plan at the time of the event giving rise to the collection and the collection is for an outstanding balance, after copayments, deductibles, and coinsurance, owed to an emergency care provider or a facility-based provider for and out-of-network benefit claim;... "          Briefly, and by way of background, many employers in Texas are turning to reference based pricing to significantly reduce what is typically the second largest item in their budget which is health care. Unlike traditional PPO's or indemnity plans, reference base pricing does not have a network and is a defined benefit. Indemnity plans reimburse hospitals and ancillary providers based upon utilizing a benchmark tied to Medicare. Unfortunately, a small percentage of balance billing does occur and in addition to suing the patient in small claims court, many hospitals in Texas and their collection...