Having an in-network obstetrician doesn’t guarantee new mothers won’t receive surprise medical bills after their babies are born.
A study published in the March issue of Health Affairs found that 11% of mothers got an unwelcome surprise from the hospital billing department following their first delivery.
And when new mothers encountered unexpected bills from out-of-network providers following their deliveries, they were significantly more likely to choose a different hospital for subsequent births, according to the study.
In fact, receiving such a bill raised the odds of them switching to another hospital for subsequent deliveries by 13% compared to mothers whose bills all came from in-network physicians. The study’s results also found that switching hospitals cut the relative risk of a second surprise bill by 56%.
The idea that a potentially random switch to a new facility would reduce surprise billing so much suggests that the incidence of out-of-network billing is concentrated in certain hospitals, Christopher Garmon, Ph.D., assistant professor of health administration at the Henry W. Bloch School of Management at the University of Missouri, Kansas City, and a lead author on the study, told FierceHealthcare.
“The way we set it up, in all the cases it’s an in-network facility and an in-network primary physician, which we assume to be the obstetrician, and so they’re in a situation where they’re likely to get a surprise bill because it’s an ancillary physician,” said Garmon.
For patients, that means it’s impossible to assume every physician with whom you have contact will be covered by insurance. Furthermore, it’s extremely difficult to figure out whether procedures performed by the physicians on call during a procedure will all necessarily be covered.
“Anecdotally what we’ve heard is that sometimes you’re just at the mercy of the anesthesiologist that’s on call that day, so it would be hard to shop for that,” Garmon said.
That dynamic makes it unlikely that patients who choose a new hospital would be able to make that choice knowing they would be less likely to receive a surprise bill.
It also provides hospitals an opportunity for competitive differentiation if they can find a way to take advantage of it. Even if arguments for improved patient satisfaction fail to resonate with hospital administrators, Garmon pointed out that surprise bills clearly affect patient loyalty.
Since childbirth is often the first interaction adults have with a hospital, a poor experience that leads them elsewhere affects the hospital’s bottom line.
Given the complications caused by the number of health plans and doctors who practice in multiple places, solid solutions appear to be in short supply. Garmon cited proposals to bundle services as one possibility, but in the near term, the most effective fix likely would be a change in legislative policy.
The study recommends a federal law limiting patients’ liability for out-of-network bills received for both elective and emergency procedures.
Like any other solution, Garmon conceded that would likely be imperfect and introduce the potential for unintended consequences. In the end, he pointed out, the problem really stems from difficulty coming up with a reimbursement rate on which doctors and insurers can agree. That creates opaque pricing, making it difficult for patients to make informed choices.
“Ultimately, I see this as a transparency issue,” said Garmon. “It’s about network transparency, and making that very clear cut where the hospital and obstetrician could say we’re in network and all of the ancillary physicians are in your network as well, you have nothing to worry about.”