Texas lawmakers plan medical billing fix next session after KXAN investigation

This report is an update to KXAN’s “Medical Debt Lawsuits” investigation. Our team will continue following the story ahead of Texas’ legislative session in 2023. 

AUSTIN (KXAN) — When Sen. Paul Bettencourt, R-Houston, signed onto Senate Bill 2122 in Texas' last legislative session in 2021, he said he thought it was a "very common sense" and "simple" way to protect patients and their finances.

"Before a health care provider pursues any debt collection against a patient," the bill read, "the provider shall issue to the patient a written itemized bill of charges for all health care services and supplies."

Though the bill — filed by Sen. Bryan Hughes, R-Mineola, who was unavailable for comment — passed the Senate, it failed to progress through the House Public Health Committee late in the session and ultimately never became law.

Since then, KXAN investigators discovered hundreds of medical debt lawsuits piling up in Central Texas courts. A common complaint the patients sued shared with our team was being unable to obtain an itemized invoice from their hospital to better understand why they were being charged specific amounts.

After learning what we'd discovered, Bettencourt said lawmakers should reconsider the legislation to prevent that problem during the next legislative session in January.

"Quite frankly, the only hook in it is: you didn't send an itemized bill, you can't collect," he said. "I think people need to know what their billing is. And this isn't a stringent requirement, because to generate the bill you have to have an itemized list anyway."

Itemized invoices

Amanda Korth, a Pflugerville mother of two young girls, said she experienced this issue after visiting an area hospital, which we are not naming because collecting outstanding debt from patients through the courts is legal.

After battling breast cancer in 2018 and undergoing a mastectomy, chemotherapy and radiation, Korth had reconstructive surgery at that hospital. Following the procedure, she said she tried unsuccessfully to obtain an itemized invoice before paying what she owed the hospital.

"The reason I hadn't paid the bill right away is I needed an itemized statement," she explained. "I had a secondary insurance company that would reimburse me for the out-of-pocket ... but they needed an itemized statement and getting that … was next to impossible."

Korth said she even filled out a release form to obtain her records but had no luck. The hospital would not speak with KXAN about specific patients, citing medical privacy laws.

"I tried calling," Korth said. "But I never could get anybody who could confirm that they had the paperwork they needed to send me an itemized statement."

After she didn't pay, Korth said the bill fell off her radar. Then, she was sued in January 2021 — two years after her surgery — for $1,021 plus $750 in attorney fees. 

"It was a sense of panic at first because you don't know ... what this is going to do to your credit," she said. "You don't know what this is going to do … basically to your financial security."

Korth said she finally obtained an itemized invoice from the hospital's attorney after being sued. The case against her was eventually dropped once she paid the full amount.

Opposition over costs

The Patient Choice Coalition, a Texas and Oklahoma lobbying organization which works to bring providers and patients together, has heard stories like Korth's. 

"A lot of our independent and physician-owned facilities have been providing itemized lists for healthcare charges for a long time," said Daniel Chepkauskas, legislative director with the coalition. "What we find is maybe more of our larger corporate entities ... they have been either reluctant or slow to offer these itemized lists to patients."

Chapkauskas testified last session in support of SB 2122 during a public hearing for the Senate Committee on Business and Commerce. He described the health care industry to KXAN investigators as "one of the most bizarre sectors of our economy in the sense that it doesn't follow the same standards."

"If we're thinking of ... purchasing a car or buying TVs, we know what the costs are for those goods and services prior to purchasing them," Chapkauskas said. "But in health care, a lot of things are backwards. We don't know exactly what our health care is going to cost until after the fact. And that shouldn't be the case."

The bill received ample support, but the Texas Hospital Association had concerns. The group opposed the legislation, saying hospitals are already required by law to provide itemized statements — if requested — but doing so with every bill would be costly.

"The estimated cost of compliance for one hospital system is between $3-4 million, without the plain language explanations, built in per year," explained Cameron Duncan, THA's associate general counsel told lawmakers during the hearing.

A spokesperson told KXAN THA offered several amendments, including language to notify patients they could request an itemized bill instead of medical providers automatically making it available. THA said its suggestions were not accepted by the bill's author, and that's why THA opposed the bill.

"We do want to be transparent with patients and help them understand the cost of their medical bills," Duncan said during the hearing. "For the patients who want this type of information, we recommend including in the normal billing statement a very clear statement that patients have the right to — at no cost — request an itemized billing statement."

What's next? 

In addition to the invoice issue, Texas lawmakers could consider another legislative measure following KXAN's investigation. Earlier this year, Rep. Nicole Collier, D-Fort Worth, spoke with our team about concerns from families since she's previously worked to improve the state's Debt Collection Act.

She said she would look into whether the state's complaint system adequately protects people involved in medical debt lawsuits. After its initial investigation, KXAN shared data and analysis with her office and is awaiting an answer on what she plans to do next.

"If this is an issue that's going to give a person pause before they take care of their health, then yes — we need to take action," Collier previously told KXAN.

Bettencourt said he would re-file the itemized invoice bill, if Hughes — the bill's original author — does not.

"This is not rocket science," he said. "Put the line item that you use to generate ... on the bill and send it to the consumer, and then everybody has full disclosure."

The “Medical Debt Lawsuits” project launched on Sept. 12, 2022, produced by Catalyst – a specialty unit within the KXAN investigative team focused on “digital-first” storytelling that aims to make a positive change in society. The unit takes a multi-platform, innovative approach to each project and rotates among various investigators. Investigative Photojournalist Richie Bowes, Graphic Artist Aileen Hernandez, Digital Special Projects Developer Robert Sims and Digital Director Kate Winkle contributed to this update.