Texas medical billing: Medicaid, Medicare, TDI and the NSA

Timely filing in Texas

Texas surprise billing law vs the federal NSA

CMS's January 25, 2022 letter to Texas treats Chapter 1467 as a specified state law. Check the plan, the service and who is billing before choosing the pathway.

Major payers

Which agencies and payers set the billing rules in Texas?

Four sets of rules decide how a Texas claim is filed and paid. Texas Medicaid is run by the Texas Health and Human Services Commission (HHSC). Medicare Part A and Part B claims go to Novitas Solutions in Jurisdiction H. Fully insured commercial plans answer to the Texas Department of Insurance (TDI). Self-funded employer plans sit outside TDI's reach and follow federal rules instead.

How does Texas Medicaid work, and who processes the claims?

Texas Medicaid is administered by HHSC. TMHP is the claims administrator, and the TMPPM is the rulebook for fee-for-service claims and for the managed care plans HHSC contracts. The October 2026 edition holds all policy changes through October 1, 2026.

Medicaid managed care in Texas is organized into programs, and each one pays through managed care organizations (MCOs) rather than through TMHP. The Medicaid Managed Care Handbook lists them:

• STAR covers acute care for children, newborns, pregnant women and some families.
• STAR+PLUS covers acute care plus long-term services and supports for adults who are 21 or older and have a disability, among others.
• STAR Kids covers acute care plus long-term services for children and young adults with disabilities.
• STAR Health serves children in foster care through a single MCO. The handbook says HHSC selected Superior HealthPlan for it.
• Children's Medicaid Dental Services use dental maintenance organizations (DMOs) instead of MCOs.

The handbook says managed care operates in 13 service areas, and STAR, STAR Kids and STAR+PLUS are statewide with at least two MCOs in each area. The Children's Health Insurance Program (CHIP) is administered by HHSC as well.

Verify eligibility through TexMedConnect, the TMHP provider portal, or the Automated Inquiry System before billing. Professional claims go on the CMS-1500 and institutional claims on the UB-04, on paper or in ANSI ASC X12 5010. The billing provider's NPI and taxonomy code are required, and a claim without them will be denied.

What is the Texas Medicaid timely filing limit?

The Texas Medicaid filing limit is 95 days from the date of service. The October 2026 TMPPM, section 6.1.4, says claims must be received by TMHP within 95 days of each date of service unless the manual states otherwise, and that claims received after the deadlines are not payable because Texas Medicaid does not provide coverage for late claims.

The word that matters is received. A claim that was sent on day 94 and rejected before it reached TMHP's system does not count as filed on day 94. The manual's exceptions follow the same logic, so the table below lists each starting point.

Exceptions follow the same logic. Inpatient claims count from the discharge date or last date of service. A Medicare crossover claim counts 95 days from the Medicare disposition date. A retroactively eligible client counts 95 days from the date eligibility was added, within 365 days of service. Out-of-state providers get 365 days, and an appeal of a denied claim is due 120 days from the R&S Report date (sections 6.1.4, 6.1.4.1 and 6.1.4.4).

The 365-day ceiling is federal: 42 CFR 447.45(d)(1) requires claims within 12 months of service. A patient with no Medicaid number yet can still be billed with 999999999 or 000000000 as the identification number. TMHP rejects it, and the rejection report is the proof of timely filing for an appeal once the number arrives.

How do filing rules change when a Medicaid managed care plan is involved?

The same 95 days apply, but the clock is met only when the claim reaches the right entity. The Medicaid Managed Care Handbook, section 2.9.1, says a claim not received by the MCO or DMO within 95 days will be denied. A claim sent to the wrong plan can be refiled with the correct MCO within 95 days of the other carrier's remittance, with proof of the original timely filing. Newborn claims go to the client's or mother's MCO within 95 days.

If a claim goes to TMHP when the patient was in an MCO, resubmit it to the correct MCO with documentation. The handbook says the MCO must honor the initial filing date.

Who is the Medicare contractor for Texas, and what is the filing limit?

Novitas Solutions is the Medicare Administrative Contractor (MAC) for Texas Part A and Part B claims. CMS lists Texas in Jurisdiction H, together with Arkansas, Colorado, Louisiana, Mississippi, New Mexico and Oklahoma, all processed by Novitas Solutions, Inc. in the CMS MACs by state table dated March 28, 2023.

Oklahoma and Louisiana share the Texas contractor. Our Oklahoma and Louisiana pages cover the state-level rules that differ.

The Medicare filing limit is one calendar year. Under 42 CFR 424.44(a)(1), for services furnished on or after January 1, 2010, the claim must be filed no later than the close of the period ending 1 calendar year after the date of service. The regulation allows extensions, including for an error or misrepresentation by a Medicare contractor and for retroactive entitlement, but the extension window ends if the request is made more than 4 years after the service date.

For dual-eligible patients, bill Medicare first. The Medicare disposition date, not the date of service, starts the Medicaid 95 days.

Our Medicare billing guide covers the fee-for-service rules.

Does a Texas out-of-network claim go to Texas mediation, Texas arbitration or federal IDR?

It depends on the plan, the service and the type of provider, and the order of those three questions is the order to ask them. CMS's letter to Texas, dated January 25, 2022, says that Texas Insurance Code Chapter 1467 and the rules in 28 Texas Administrative Code Chapter 21, Subchapter PP, are a specified state law for the No Surprises Act. A specified state law decides the out-of-network rate where it applies. Where it does not, the federal independent dispute resolution process applies.

The letter limits the Texas law to specific services. They are emergency care in a hospital emergency room or a licensed free-standing emergency room, services by an out-of-network facility-based provider at an in-network facility, and out-of-network diagnostic imaging or laboratory services performed in connection with in-network care.

The Texas law covers emergency care in a hospital or licensed freestanding ER, services by an out-of-network facility-based provider at an in-network facility, and out-of-network imaging or lab work tied to in-network care.

It covers fully insured PPO, EPO and HMO plans regulated by TDI, plus the Texas state employee and retiree plans. Plans outside that description are not covered by the Texas process as CMS describes it.

Within the Texas law, mediation (Subchapter B) applies to an out-of-network facility and arbitration (Subchapter B-1) to a provider who is not a facility. Air ambulance is the exception: the letter says federal IDR applies to nonparticipating air ambulance providers for insured plans in Texas.

Two limits matter. Mediation does not apply to the professional or technical component of a physician service (section 1467.050). In arbitration the arbitrator decides only the reasonable amount, weighing the 80th percentile of billed charges and the 50th percentile of in-network rates in the same geozip area, and multiple claims can share one arbitration only for the same provider and up to $5,000 in total.

The federal rules are on our out-of-network billing and IDR page, in the state surprise billing laws guide and on the IDR process page.

What should a freestanding ER in Texas know about billing?

Texas treats licensed freestanding emergency rooms the same as hospital emergency rooms for the out-of-network payment law, according to CMS's Texas letter.

The federal rules use a definition of their own. Under 45 CFR 149.30, an independent freestanding emergency department is geographically separate and distinct and licensed separately from a hospital under State law. A hospital emergency department does not qualify.

Texas has a separate licensing chapter for these facilities, Health and Safety Code Chapter 254. A facility may not operate or call itself a freestanding emergency medical care facility without a license, each location needs its own license, and the license covers only a facility that is open 24 hours a day, 7 days a week (section 254.051). Before it accepts a patient, the facility must have a referral, transmission or admission agreement with a licensed Texas hospital (section 254.153).

The chapter also sets patient disclosure rules. The facility must post a notice that it is a freestanding emergency facility that charges rates comparable to a hospital emergency room and may charge a facility fee (section 254.155). It must give each patient a written disclosure listing its observation and facility fees and the health plans in which it is in network, or stating that it is out of network for all plans. That statement must be in at least 16-point boldface type, in English and Spanish, with a place for the patient and a staff member to sign and date it (section 254.156).

A facility may not say it takes or accepts an insurer unless it is a network provider of that insurer (section 254.157). Operating without a license is a Class C misdemeanor, and the administrative penalty is up to $1,000 per violation (sections 254.204 and 254.205). Confirm it against the current chapter before you publish a disclosure.

Facility claims go on the UB-04 and carry revenue codes; the physician group bills separately on the CMS-1500. Our ED and freestanding ER page and hospital and facility billing service cover the facility workflow. The emergency medicine billing page covers the professional side.

What do Texas prompt pay rules mean for commercial claims?

Texas commercial plans must act on a clean claim within 30 days if it arrived electronically and within 45 days if it arrived on paper. That is the rule for preferred provider plans in Insurance Code section 1301.103 and for HMOs in section 843.338. By that date the plan must pay the claim, pay the undisputed part and say in writing why the rest is not paid, or deny it in writing with the reason.

Providers have 95 days from the date of service to submit the claim (sections 1301.102 and 843.337). A plan that needs more information must ask in writing for an attachment within 30 calendar days of receiving the clean claim, and may ask only once (sections 1301.1054 and 843.3385).

The same tiers apply to a claim paid in part, measured on the underpaid amount. A plan owes no penalty if it paid below the contracted rate and the provider reports the underpayment more than 270 days after receiving it, provided the plan pays the balance within 30 days of the notice (section 843.342(h)). A preferred provider may recover reasonable attorney's fees and court costs in a suit over these claims (section 1301.108).

Medicaid has a federal standard. Under 42 CFR 447.45(d), the state agency must pay 90 percent of clean practitioner claims within 30 days and 99 percent within 90 days. That is an agency target, not a deadline for one claim, so it does not replace the 95-day filing limit.

Track the date each payer received the claim, because it is the evidence in a late-payment dispute. See clean claim.

How do we handle billing in Texas?

We work Texas claims by payer type: TMHP and the MCOs for Medicaid, Novitas for Medicare, and plan-specific rules for commercial carriers. Our Texas out-of-network work runs from eligibility assessment through open negotiation, dispute submission, deadline management, documentation validation and outcome tracking, under federal IDR and applicable state pathways including Texas TDI.

Before any dispute is filed we check which pathway applies, because the wrong one wastes a fee and a deadline. We run jurisdiction-specific compliance checks across open negotiation, IDR and TDI workflows. If you run an ER, hospital or physician group in Texas, book a call and we will check your last quarter of underpaid claims against the pathway rules above.