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Texas Department of Insurance
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Commissioner’s Bulletin # B-0011-99

February 19, 1999


Re:   Balance Billing Enrollees for HMO Covered Services

We have received complaints from Wellchoice enrollees that network physicians have billed them for services under their Wellchoice contract.

I know that many of you suffered significant losses as a result of the Wellchoice insolvency. Clearly, this is not a good situation for anyone. We are well aware of your plight and have requested legislation to increase capitalization requirements for HMOs. This should help ensure that Texas HMOs have the resources to fulfill their obligations to you and to their enrollees. Nevertheless, you should not compound your financial problems by adding legal problems by attempting to collect from enrollees the amounts owed to you by the insolvent HMO.

By law, contracts between a health maintenance organization and a physician or provider require that the physician or provider hold an enrollee harmless for payment of the cost of covered health care services in the event the HMO fails to pay the provider for health care services. This provision, which is found in Texas Insurance Code Art. 20A.18A(g), means that network physicians and providers may not bill enrollees for services that are covered by an HMO ("balance billing") even if the HMO fails to pay for those services.

You cannot avoid these prohibitions against balance billing by having your patients sign "waivers." Further, if you have collected for covered services from an HMO enrollee you must make a refund immediately. As Commissioner, I will have no other choice than to initiate legal action against you if you do not make the refund and stop all collection efforts against the enrollees.

As Receiver for Wellchoice, I will make every effort to maximize the amount of money available to pay your claims. As a creditor of the insolvent estate, you are eligible to receive a prorated amount of any assets of the receivership estate. At this time, I do not have an estimate of what that amount of money will be.

Within the next few weeks, I will be selecting a Special Deputy Receiver (SDR). Once this selection is complete, you will be receiving a "Proof of Claim" form to document your claim. Filing the Proof of Claim within the timeframes set by the SDR establishes your rights to receive any distribution from the estate. At this time, you should gather documents to support your claim.

For information regarding the issue of balance billing contact Pat Brewer at 512-322-4266. _____________________________


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