February 6, 2021

The State's Medical Billing Tax:
Does It Only Affect Private Practices?
365 Words, a 1.5-Minute Read

The Texas State Comptroller enacted a tax on medical billing in 2019. (The tax applied to private health care entities that outsourced their medical billing; private entities that handle their medical billing in house and non-profits are exempt.)

After meeting with health care stakeholders, the comptroller agreed to eliminate the tax with one caveat: The 2021 Texas Legislature must permanently repeal the medical billing tax through legislation. Otherwise, the tax will go back into effect.

Rep. Tom Oliverson, MD (R-Spring) introduced the legislation several weeks ago. Sen. Robert Nichols (R-Jacksonville) is expected to file the Senate companion in the near future. And it is important to note that the state's comptroller, Glenn Hegar, has been very helpful with this legislation.

This legislation will clearly be one of the top priorities for organized medicine and other segments of the health care industry. This is the rare bill that has brought every segment of health care together.

Academic or Hospital Employment Model: What Does This Mean?
This is one of those issues that directly affects a segment of orthopaedics, and in this case, those private practices that outsource their medical billing.

The reality is that this business-specific issue, like so many other business issues, affects surgeons in academic and hospital employment models in an indirect way. As so many say:

"The future of private practice affects every type of orthopaedic practice model in Texas: private, hospital employed, and academic. Hospitals and academic entities often base salaries on market value, and what the market will pay you in a private practice setting is an important factor."

PPP & State Franchise Tax?
The 2021 Texas Legislature is also considering other legislation that could affect orthopaedic practices. Sen. Kelly Hancock (R-DFW) and Rep. Charlie Geren (R-Fort Worth) filed legislation that would exempt PPP from "gross income" for tax purposes as it relates to the state's franchise tax.

Click here to learn more.

Other Bills: Dozens of Them
Click here to view TOA's bill tracker, which tracks the dozens of bills that relate to orthopaedics.

Click here to view TOA's musculoskeletal primer for state lawmakers.

Click here to send an e-mail about opioid policy to your state lawmakers.
Rep. Tom Oliverson, MD (right) with San Antonio orthopaedic surgeon John Hinchey, MD at TOA's 2019 Annual Conference in Houston. Rep. Oliverson is the sponsor of the medical billing tax legislation.
Bobby Hillert | Executive Director
Texas Orthopaedic Association
Bobby@toa.org | 214.728.7672 m