New Texas Insurance Laws: Why “Out-of-Network” Doesn’t Mean “Out-of-Pocket”

The Texas surprise billing law provides important insurance protection for patients receiving care from out-of-network providers. Here’s what Austin TX patients need to know.

If you’ve been delaying your knee or hip surgery because ATX Orthopedics is “out-of-network” for your plan, there is good news. Recent updates to Texas insurance laws (including HB 3359) have drastically changed how your insurance company handles your payments.

The “In-Network Credit” for Out-of-Network Care

For many Texans, the biggest hurdle to seeing a specialist of their choice was the “Separate Deductible” trap. Previously, if you saw an out-of-network surgeon, your payments went into a separate, much higher bucket that never seemed to get filled.

That has changed. Under current Texas law, if your state-regulated health plan has an inadequate network or you receive care at an in-network facility, your insurance company may be required to:

1. Apply your out-of-network surgery payments directly to your in-network deductible.

2. Count those payments toward your annual out-of-pocket maximum.

How to Tell if You Are Protected

These protections apply to “state-regulated” plans. You can identify these easily by looking at your insurance card:

• Look for “TDI” or “DOI”: If you see these letters printed on your card, you are protected by Texas state law.

• PPO and EPO Plans: These protections are strongest for Preferred Provider and Exclusive Provider plans.

Why This Matters for Your Surgery

At ATX Orthopedics, we believe you should choose your surgeon based on their expertise—like Dr. Gallagher’s muscle-sparing knee techniques or Dr. Amis’s specialized hand surgery—not just a list of names in an insurance directory.

Because your surgery payments now “cross over” to your main deductible, you can reach your yearly maximum faster, often resulting in your insurance covering 100% of your other healthcare costs for the remainder of the year.

Understanding the Texas Surprise Billing Protections

Texas House Bill 3359, which took effect in 2020, was one of the most significant pieces of state healthcare legislation in recent years for Texas patients. The law created enforceable protections against surprise medical billing in specific circumstances, particularly when a patient receives out-of-network care at an in-network facility or when a patient’s insurance network is deemed inadequate. The law establishes an independent dispute resolution process that allows providers and insurers to resolve payment disputes without involving the patient in billing battles. For patients in Austin and throughout Texas, this means greater financial predictability when receiving specialized orthopedic care.

When Does Out-of-Network Care Qualify for In-Network Protections?

Under Texas law, you may be entitled to in-network cost-sharing protections when you receive out-of-network care in certain situations. These include receiving care at a facility that is in-network with your plan even if the treating physician is not; situations where your health plan’s network does not include a provider in your geographic area who can provide the care you need (also known as network inadequacy); emergency care situations regardless of the provider’s network status; and situations covered by the federal No Surprises Act that parallel the Texas protections. Whether these protections apply to your specific plan and situation depends on the type of insurance you carry — state-regulated plans are covered by Texas law, while self-funded ERISA plans (common with large employers) are covered by the federal No Surprises Act instead.

State-Regulated vs. Self-Funded Plans: What’s the Difference?

One important distinction that affects your protections is whether your insurance is a state-regulated plan or a self-funded (ERISA) plan. State-regulated plans — typically individual and small-group plans purchased through the marketplace or directly from an insurer — are governed by Texas Department of Insurance rules including HB 3359. Self-funded plans — common among larger employers who pay employee claims directly — are governed by federal ERISA law and the No Surprises Act rather than Texas state insurance regulations. If you are unsure which type of plan you have, check your insurance card or call the member services number on the back of your card and ask whether your plan is a “fully insured” or “self-funded” plan.

How ATX Orthopedics Navigates Your Insurance

At ATX Orthopedics, our billing team is experienced in working with both state-regulated and self-funded insurance plans. We will verify your specific benefits before your surgery, provide a good-faith estimate of your expected costs, and work directly with your insurance company to pursue appropriate reimbursement. In many cases, we are able to secure in-network level cost-sharing for our patients even when we are out-of-network with their plan. We believe that financial uncertainty should never prevent someone from accessing excellent orthopedic care, and we are committed to transparency and advocacy on your behalf.

Take the Next Step

If you have questions about your specific insurance plan’s coverage for care at ATX Orthopedics, please call our office at 512-960-4590 before your appointment. Our team can review your benefits, explain your estimated out-of-pocket costs, and help you understand which Texas or federal protections may apply to your situation. Don’t let out-of-network concerns stand between you and the orthopedic care you need — contact us today to learn more.

Related Articles & Resources

• in-network protection as an out-of-network provider
• your rights against surprise medical bills
• ATX Orthopedics services