1. Surprise Billing and Balance Billing Protections

One of the biggest challenges in healthcare billing is surprise billing—when patients receive unexpected bills for out-of-network services.

• Texas:
  In 2019, Texas passed Senate Bill 1264, banning balance billing in emergency care and certain non-emergency cases. Payment disputes between providers and insurers are handled through baseball-style arbitration, where each side submits an amount and an arbitrator selects one. Since the law’s implementation, surprise billing complaints have dropped by nearly 95%, making Texas a national leader in tackling the issue.

• New York:
  New York also has strong protections, relying on an independent arbitration system that benchmarks payments against the FAIR Health 80th percentile of charges. This has resulted in an 88% decrease in surprise bills since enactment.

Comparison: Both states protect patients well, but New York’s reliance on FAIR Health data ensures transparency in setting benchmarks, while Texas emphasizes negotiation and arbitration.

2. Facility Fees and Outpatient Billing

Facility fees—extra charges for outpatient visits at hospital-owned clinics—are a growing concern nationwide.

• Texas:
  Facility fees have skyrocketed in recent years, with examples of $90 visits increasing to over $600. While controversial, Texas has yet to impose caps but is facing legislative pressure for transparency reforms.

• New York:
  In June 2023, Public Health Law §2830 prohibited facility fees for preventive services and required hospitals to notify patients 7 days in advance if a fee would apply. Advocacy groups are now pushing the Fair Pricing Act, which would cap hospital clinic charges at 150% of Medicare rates and further restrict facility fees.

Comparison:Medical billing services in New York leads in consumer protection with outright bans and caps, while Texas is still addressing the problem through transparency and debate.

3. Billing Transparency Requirements

Both states are strengthening rules around clear, itemized medical bills.

• Texas:
  Senate Bill 490 (2023) requires hospitals and facilities to provide patients with itemized bills within 30 days of receiving third-party payment. The bills must include plain language, billing codes, and insurer adjustments.

• New York:
  New York’s October 2024 reforms added strict requirements:

  • Patients must give consent for payment after services are rendered and costs are explained.

  • Providers cannot require credit card pre-authorization for emergency or medically necessary care.

  • Providers must also disclose risks associated with paying by credit card.

Comparison: Texas focuses on itemization and billing clarity, while New York emphasizes patient consent and financial safety.

4. Medicaid and Insurance Landscape

State Medicaid structures heavily influence billing practices.

• Texas:

  • One of the highest uninsured rates in the country (~18%) due to not expanding Medicaid.

  • Medicaid services are moving toward full managed care, which complicates billing and coding requirements.

  • Private insurers like Blue Cross Blue Shield of Texas, UnitedHealthcare, Humana, and Cigna dominate the payer mix.

• New York:

  • Operates a centralized Medicaid program with more state oversight.

  • Broader Medicaid eligibility reduces the uninsured rate compared to Texas.

  • Payer policies and reimbursement are tightly regulated by state authorities.

Comparison:Medical billing services in Texas providers face greater revenue cycle challenges due to high uninsured populations and shifting Medicaid rules. New York has stricter state control and payer regulation, but providers benefit from a more stable insured base.

5. Third-Party Billing and Compliance Rules

Both states regulate relationships between providers and billing companies.

• Texas:

  • Third-party billing vendors must register with Medicaid.

  • Billing contracts tied to a percentage of collections are prohibited to prevent overbilling incentives.

• New York:

  • The Medicaid Fraud Control Unit (MFCU) aggressively enforces rules against fee-splitting.

  • Percentage-based billing contracts are illegal, with fines of up to $10,000 per violation.

Comparison: New York enforces compliance more aggressively, while Texas emphasizes vendor registration and contract integrity.

6. Timely Billing Requirements

How quickly providers must bill patients varies.

• Texas:

  • Providers must bill patients within 10 months of service (by the first day of the 11th month).

  • Debt becomes uncollectible after 4 years.

  • Itemized statements must be delivered within 30 days of insurer payment.

• New York:

  • No specific state law found on billing deadlines.

  • Default rules are based on payer contracts and federal timelines (e.g., Medicare filing deadlines).

Comparison: Texas offers stronger consumer protections by limiting billing windows, while New York relies more on payer policies.

Summary Table

Final Insights

Both Texas and New York are at the forefront of healthcare billing reform, but they tackle challenges differently:

• Texas prioritizes transparency and billing deadlines but still grapples with high facility fees and uninsured populations.

• New York emphasizes patient protections, consent, and price controls, making it stricter for providers but potentially more affordable for patients.

For revenue cycle management (RCM) professionals, understanding these differences is critical. A billing strategy that works in New York may not align with Texas regulations, and vice versa. Practices, hospitals, and third-party billing firms must adapt to state-specific laws to optimize collections while staying compliant.