This report is an update to KXAN’s “Medical Debt Lawsuits” investigation. Our team followed this legislation during Texas’ regular legislative session.

WILLIAMSON COUNTY, Texas (KXAN) — Michelle Ledesma breathed a sigh of relief as lawmakers voted to send Senate Bill 490 to Gov. Greg Abbott.

It was May and she had already been tracking the bill for months during the last regular session.

“I was getting email alerts,” Ledesma said. “I started to follow each stage.”

It was the first time she had followed legislation this closely. Ledesma, who is from Cedar Park, added she realized the impact was wide reaching and not just personal.

Ledesma explained in 2018 she was hospitalized for a severe bacterial infection. She said she had insurance but was billed more than $2,000 out of pocket. Two years after her treatment, she was sued by an area hospital for medical debt. 

“I was sued for a bill that I received from a hospital, and I kept asking for the itemized statement. I never received it,” Ledesma added. “All I wanted was to know what I was being charged for.”

Law requirements 

Stories like Ledesma’s have been heard by lawmakers who pushed for medical billing transparency.

Effective Sept. 1, hospitals and health care facilities are required to give patients a written itemized bill before sending it to collections or trying to collect any money owed.

The law states the itemized bill has to be in terms the patient understands and include medical codes and prices. The invoice can also be issued electronically through a patient portal.

“My team and I are already kind of getting ready to make sure that those hospitals and medical facilities are in compliance with it,” said State Rep. Caroline Harris, R-Round Rock. “And we’re also ready to just figure out, ‘Hey, if they’re not in compliance, why, you know, how can we help? Is there some issue with the language, you know, to clear up.'”

Harris worked closely with Sen. Bryan Hughes, R-Mineola, to pass the legislation.

“It’s remarkable how much opposition there was to a bill like this. The second session for this bill to go through,” said Hughes on the Senate floor moments before final passage. 

The legislation follows a KXAN investigation into a Central Texas hospital that sued hundreds of patients over unpaid medical bills. Many of those patients told KXAN they received vague bills and couldn’t get an itemized invoice before being served with a lawsuit. 

HHSC oversight 

The Texas Health and Human Services Commission will oversee the rollout of the law and compliance. The agency published a Guidance Letter on Monday which outlines provider responsibilities and expectations. 

The letter states providers must submit the itemized bill to the patient no later than the 30th day after the provider receives a final payment for the service or supply from a third party. 

“While a patient may request to not receive an itemized bill, the provider must make an itemized bill available if the provider is requesting payment from the patient,” the Guidance Letter outlined.

It also added that if the provider is not attempting to collect money from the patient, the provider is not required to provide the patient with an itemized bill except as required under any other state or federal law. 

HHSC is also primarily responsible for taking disciplinary action against providers in violation. In an email, a spokesperson explained enforcement could include denying, suspending or revoking a license and administrative penalties ranging from $1,000 to $25,000 for each day in violation depending on provider type. 

“The other piece of this is that the courts can be involved as well,” Harris said. “So, a lot of these cases have gone to court where a hospital has sued somebody for not paying a medical bill. And so those judges and justices have the opportunity to say, ‘OK, well, I know now that the hospital has to provide an itemized bill. Did you do that? You know, where’s the proof of that, so that we can see if this charge is actually accurate or not.'” 

The Texas Hospital Association, which opposed the legislation due to anticipated costs, said in an email it’s been working to make sure hospitals know about the law and has been offering guidance so they’re ready. 

“Hospitals want to provide the best care and the best information possible for patients. Transparency is in everyone’s best interest, and Texas hospitals are fully engaged to ensure their patients have everything they need,” said Carrie Williams with THA.

Already seeing an impact 

The legislation only applies to health care facilities and hospitals but does not apply to doctors or federally-qualified health centers.

Providers impacted include abortion facilities, ambulatory surgical centers, birthing centers, chemical dependency treatment facilities, crisis stabilization units, end stage renal disease facilities, freestanding emergency medical care facilities, general hospitals, limited services rural hospitals, private psychiatric hospitals, narcotic treatment programs, special care facilities and special hospitals, according to the Guidance Letter.

“A lot of times with a new law that’s so big like this, there is a little bit of runway where you kind of have to figure out how you help people get into compliance,” Harris said. 

The law is not retroactive, so it doesn’t apply to cases before Sept. 1 like Ledesma’s. However, she thinks the new law’s already having an impact.

“When I have gone to an emergency room or to a recent doctor — different types of procedure — I’ve asked for the itemized statement, and I noticed I’m getting it faster. You know and that’s a good plus for us because we’re able to see it sooner,” Ledesma said. 

Her case initially resulted in a judgement in her favor but records show lawyers representing the hospital are appealing. 

“A patient shouldn’t have to go through that. You know, they’ve already been — they’ve already gone through a hardship of — of an illness or an injury. They shouldn’t have to go through that all over again two years later to get hit with a lawsuit because an itemized statement wasn’t sent to them,” Ledesma said. 

Harris urges Texans to contact her office if they come across a provider not complying. Complaints can also be filed through HHSC, which is in the process of developing rules to implement the law. 

“If anybody’s not able to get it still, if they’re having difficulty, we need to hear those stories,” Harris said. “So that we can get back to HHSC and say, ‘OK, now we might need to see some sort of disciplinary action, you know. But hopefully we won’t have to see any of that. Hopefully, we’ll see compliance across the board. And, again, we’re prepared to look at that, watch it, make sure that it is doing its job that the law is helping people like we wanted it to.”