When Thomas Harrington went to the emergency room for treatment of a smashed finger one Sunday morning in August 2007, he fully expected his insurance would cover his costs.

MONA REEDER/DMN

Thomas Harrington went to an emergency room in 2007 for a smashed finger. The hospital was in his network; the doctor who treated him wasn't.

The hospital, Denton Regional Medical Center, was included in his insurer's network, after all.

Unfortunately for Harrington, the emergency room doctor was not.

As a result, the 48-year-old Denton man was billed for the balance not paid by his insurer.

"The next thing I know, I checked my credit report and saw that the doctor submitted $350 to collections," Harrington said. That debt lowered his credit score from 775 to 630, he said.

Harrington was caught by a practice known as balance billing, which typically occurs when a patient visits a hospital in his insurer's network and is treated by hospital-based physicians, such as anesthesiologists and radiologists, who are not in the network.

Without a prearranged contract in place, doctors in such situations can demand any price from the patient's insurer, but the insurer is under little obligation to pay.

In the end, the patient is stuck with the unpaid balance.

Holly Hayes, an Austin-based mediator, offered a typical scenario:

"A mother gives birth in the hospital and the next day a neonatologist visits the baby before both are discharged home. If the neonatologist is not part of the hospital preferred provider plan, the mother will be billed for the balance of the amount not covered by insurance."

It's unclear how much balance billing occurs, but anecdotally, there has been enough that state Rep. Kelly Hancock, R-North Richland Hills, authored legislation that provides a mediation process for consumers to dispute balance billing practices.

Hancock's measure, which became law in June, allows patients with medical debt exceeding $1,000 to have a mediator decide what they owe, provided the medical service was conducted by a physician in a hospital covered under the patient's insurance.

Hancock said the issue caught his attention after he received complaints from constituents and became aware of balance billing among the state's employees. In 2007 and 2008, state employees were "balance billed" for $383.8 million, Hancock said.

"My desire is to not get government involved in health care, but to give the patient more leverage," Hancock said.