The Texas Comptroller announced on March 19th that the recent policy change that would have made medical billing services subject to state sales tax effective April 1, 2020, has been delayed until after the 2021 legislative session.
In the state of Texas, insurance claim adjustment and processing are considered taxable services. Since 2002, the Comptroller’s office has held the position that medical billing was not considered an insurance claim adjustment or claim processing. Therefore, medical billing has not been considered a taxable service.
In November 2019, the Comptroller issued an updated advisory opinion that reversed the long-held position and stated that medical billing services would have been subject to sales and use tax, as they classified medical claim preparation as an insurance function, and therefore taxable.
While the policy implementation date is delayed, for now, this policy is scheduled to go into effect on October 1, 2021, if a legislative change is not enacted during the 2021 legislative session.
abeo recommends you seek the advice of counsel and/or financial advisers regarding the relevance of this update on your business.
abeo Management Corporation (abeo) serves as a leading source of revenue cycle management and practice management with a specialization in anesthesia. The company leverages its people, processes, and software to serve independent practices, surgery centers, hospitals and healthcare systems with a scope of services that include billing, coding, transcription, practice management, and business consulting.