AHIP: Out-of-network bills vary greatly nationwide

The amount providers bill consumers for out-of-network care varies greatly from state to state, according to an analysis from America's Health Insurance Plans (AHIP), findings the group says underscore the value of health plans' provider networks. 

In an effort to better understand balance billing, or the practice in which providers bill the patient for any amount not paid by the health plan, AHIP completed studies in 2009 and 2013 that compared billing practices of out-of-network providers for 97 commonly used procedures to the corresponding fees paid by Medicare.

Here are some key takeaways from the analysis:

  • Out of the 97 procedures studied, average out-of-network billed charges ranged from a low of 118 percent of corresponding Medicare fees to a high of 1,382 percent of corresponding Medicare fees.
  • Fifty-seven out of the 97 procedures had an average out-of-network billed charges of 300 percent or higher compared to the corresponding Medicare fees.
  • For many procedures, there were clear regional differences. For example, states that had a high out-of-network charges-to-Medicare fee ratio for gall bladder surgery also had high ratios for other gastrointestinal procedures, notes AHIP.
  • High out-of-network charges often result in balance billing--total excess costs for consumers amounted to some $3.2 billion.

Given the report's findings, AHIP spokeswoman Clare Krusing tells Kaiser Health News that limits should be set on the amount that out-of-network providers can charge patients.

But Steven J. Stack, M.D., president of the American Medical Association, tells KHN in a statement that the report is "grossly misleading," since it contains a handful of extreme examples and compares them to Medicare payments that have yet to keep up with inflation.

"If there is a growing problem with out-of-network billing, it's because the insurance industry has created it with ever more restrictive provider networks," Stack added.

In fact, due to the increasing prevalance of narrow networks, the National Association of Insurance Commissioners is working to hash out a new model network adequacy law.

For more:
- here's the report (.pdf)
- check out the KHN piece

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