New Law Continues to Require Out-of-Network Facility-Based Physicians to Notify Patients of Mediation Rights

June 23, 2015 | Insights

Early last week, Gov. Greg Abbott signed SB 481 into law. The new law, which will become effective on September 1st, gives Texas consumers the option to mediate medical bills that they receive from out-of-network facility-based physicians in connection with services received at in-network facilities and requires such physicians to notify the consumers of their mediation rights.

Recognizing that balance billing had become a significant issue for Texans, in 2009 the Legislature enacted HB 2256 to establish a mediation process for consumers billed over $1,000 (after the application of copayments, deductibles, and coinsurance) by out-of-network facility-based physicians at in-network facilities. HB 2256 also required such physicians to include in their billing statements “language sufficient to notify the patient of the mandatory mediation process.”

Since then, bill sponsor Kelly Hannock claims that “mediations have saved consumers millions and virtually all claims have been settled” but that “balance billing continues to be common practice and it has become increasingly difficult for consumers to avoid being balance billed in emergency care situations.”1

Thus, to address the continued difficulties faced by consumers as a result of balance billing, this year the Legislature enacted SB 481. SB 481 amends the current law by reducing the $1,000 threshold to $500, thereby giving consumers expanded access to the mediation process. And, while the new law continues to require out-of-network facility-based physicians to notify patients of their mandatory mediation rights, the notification requirement has been enhanced. Out-of-network facility-based physicians’ billing statements must now include a “conspicuous, plain-language explanation” of the mandatory mediation process.

If you would like assistance drafting language notifying patients of the mediation process, or if you have any questions about SB 481 or managed care issues in general, you may contact, Mary Emma Karam at 214.953.6041 or

1Bill Analysis, S.B. 481, 84th Tex. Leg. (R. Sess. 2015) (Kelly Hannock, et al).

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Mary Emma Karam
Partner, Dallas