Senator Eliot Shapleigh - El Paso, Texas

A bill awaiting Gov. Rick Perry's signature would fundamentally change the way college students pay for health care at large Texas universities, requiring schools for the first time to bill insurance companies for care at campus clinics.

The legislation would require schools with 20,000 or more students — including the University of Texas and Texas A&M University — to bill insurance companies when students have coverage. It also would require them to contract with the three largest health insurers in their region to offer coverage to uninsured students. Right now, public university students — even those with health insurance — generally pay for health services through tuition or fees and whatever their campus clinic charges, often no charge or less than $25 for routine visits.

Now, schools are scrambling to figure out how the legislation would affect them and their students, and several have questioned who would benefit.

State Rep. Fred Brown, R-Bryan, author of House Bill 103, said it's a good deal for the state, and ultimately, taxpayers, whom he says subsidize student health centers. Others contend it benefits private companies that specialize in handling insurance claims for universities whose health center staffs aren't equipped to tackle complicated insurance billing.

Officials at several universities, including UT, said their health centers get no state subsidies and are self-supporting. The UT health center receives $8.7 million a year, largely from tuition and student payments for services, said Mary Knight, the school's budget director.

UT System spokesman Matt Flores said UT officials had no comment about the legislation because it's being reviewed. In a legislative analysis of the bill, UT System officials are quoted as saying they might have to raise student health costs to do what the legislation requires.

Experts said student health centers around the country are increasingly considering ways to use insurance, but if Perry signs the bill into law, Texas could be the first state to mandate the filing of student insurance claims, said Dr. James Turner, president of the American College Health Association and executive director of the Department of Student Health at the University of Virginia.

"Filing for health insurance claims can be a pretty effective means of generating revenue," Turner said. "But there is an administrative cost associated with it."

His school tried it in 1996 or 1997 but ditched it a year later after hiring an outside billing firm, Turner said. The school collected only a small portion of the insurance payments because "we had 900 insurance plans from 47 different states and 45 different countries" and because the health center wasn't part of insurance companies' provider networks, Turner said.

Brown, however, expects taxpayers to save money and health centers to generate about $30 million by billing insurance companies.

"In essence, the taxpayers are paying for the health centers when 70 percent of the students have health insurance," Brown said. "It's like buying a new car and not driving it. They're paying for the luxury of having insurance and not using it."

State Rep. Patrick Rose, D-Dripping Springs, disagreed the state would save money. The legislation "will increase the cost of care of students — both insured and uninsured," Rose said. He voted against the bill.

Sherry Bell, consumer, education and outreach coordinator for UT's Student Health Center, said students pay an average of $23 per visit and the clinic had 78,000 visits in the 2007-08 school year. It provides a full array of primary care, urgent care, immunizations, physical therapy, women's health services and more, including health education, she said.

A state report in 2005 said that 24.9 percent of the center's students were not insured.

Brett Baker, student body president at Texas State, testified against the bill at a House Higher Education Committee hearing March 25, saying he worried about uninsured students being priced out of care. Right now at his school, where fellow students pay $53 a semester in health fees, "60 percent have no charge at all and 79 percent (of students) are charged $20 or less," Baker told lawmakers. "It's important that we keep that intact."

Rose's office said Texas State's health center is self-sustaining and maintains itself with student fees and payments.

Health centers would have to charge students more to cover the enormous administrative costs of billing insurance companies, Dr. Emilio Carranco, director of the center, told the committee. It didn't make sense that students would have to pay an insurance deductible for a service that now costs $20, he said, adding that "deductibles of $1,000 or $2,000 are not uncommon."

"It's not coming out of the insurance company's pocket," Carranco said. "It's coming out of the student's pocket."

Brown said the schools could use the money they generate by charging the insurance companies to pay students' deductibles and co-pays.

At Texas A&M, where students pay $69.25 per regular semester for health services, Student Health Services Director Dr. Martha Dannenbaum isn't sure who would benefit from the legislation or whether student health fees would rise at A&M. "I think it would be interesting to know what the impetus for this was."

Brown said the idea came to him in 2003 when the state was looking for ways to save money. "This is $30 million that could go to health and human services or CHIP," he said, referring the Children's Health Insurance Program.

Rose said the bill probably will cost students more but will "make the vendor some money," referring to whatever company a university might hire to help it bill insurance companies.

Brown said his goal was to help taxpayers, not benefit billing companies.

San Diego-based Highland Campus Health Group is one of the companies that specializes in insurance billing for universities. It has offices in Abilene and Dallas and hired Austin lobbyist Trey Blocker during the recent legislation session.

Blocker did not return a call seeking comment.

Highland CEO Andrew Menter said he couldn't disclose what it charges schools or discuss Brown's bill because it's pending legislation. But he disagreed that students would pay more if the bill passes.

"Insurance billing should help all students, insured and uninsured. And it should help a university contain student fees," he wrote.

He said in an e-mail interview that his company generally increases a health center's revenue by 10 percent to 15 percent. In Texas, it has contracts with Baylor University, the University of North Texas and UT San Antonio's School of Nursing, Menter said.

Highland isn't billing for the University of North Texas because "there was disagreement about how the billing should be implemented," said Deborah Leliaert, the school's vice president for university relations.

The contract would allow Highland to keep 50 percent of the money it collected from insurance companies for routine services and 15 percent for others. Leliaert said the health center balked at a requirement that students — who now pay a $69 per semester health fee and aren't charged for routine health center visits — would also have a co-pay for every visit. Leliaert said the clinic is self-sustaining and does not receive state aid.

Highland also has a contract with Ohio State University, where Vice President Kent Smith Jr. said students are required to have health insurance.

Smith said the school has generated $300,000 in income in the past year by having the company handle its billing.