The problem of large and unexpected surprise healthcare bills dominated health headlines in 2019.
Now, a new study to be published in the January print issue of Health Affairs put a figure on how much it's costing when patients are unwittingly treated by out-of-network providers in in-network hospitals: $40 billion annually.
Led by Zack Cooper, a researcher in the Yale School of Public Health and the department of economics, the study found at in-network hospitals, nearly 12% of anesthesiology care, more than 12% of care involving a pathologist, 5.6% of claims for radiologists and 11.3% of cases involving an assistant surgeon were billed out of network.
"When physicians whom patients do not choose and cannot avoid can bill out of network for care delivered within in-network hospitals, it exposes patients to financial risk and undercuts the functioning of health care markets," the authors wrote in the study. "The ability to bill out of network allows these specialists to negotiate artificially high in-network rates.
The researchers’ estimates show that if these specialists were not able to bill out of network, it would lower physician payments for privately insured patients by 13.4% and reduce total healthcare spending for people with employer-sponsored insurance by 3.4%. That works out to about $40 billion a year, they said.
The authors used 2015 data from a large commercial insurer for their analysis. The study was funded by the Laura and John Arnold Foundation and the Tobin Center for Economic Policy at Yale University.
Out-of-network billing is more prevalent at hospitals in concentrated hospital and insurance markets and at for-profit hospitals, the authors said.
“Any policy addressing out-of-network billing must achieve two aims: protect patients from financial harm and introduce a competitively set price for physician services or identify the amount insurers must pay providers if a policyholder is treated by an out-of-network physician,” the authors said in a statement. “Our proposed policy solution—requiring hospitals to sell a package of facility and physician services—would protect patients, restore a competitively determined price for physician services, and lower commercial health spending.”