Even when patients go to a hospital within their insurance coverage network, they still risk being seen by individual physicians who don’t take their insurance. Later, patients may get billed for the amount their insurance company doesn’t cover for out-of-network services.
A new study by researchers at Yale University found that some of these out-of-network charges can be significant among certain specialties.
“So you go in to get a surgery, you do everything right -- you find an in-network surgeon at an in-network hospital,” said Zack Cooper, a Yale associate professor of public health and economics. “We still don’t have choice over who your anesthesiologist is or who the radiologist is reviewing some of your material. And it turns out the bills from those physicians can be pretty sizable.”
Cooper was on a team of researchers that looked at 3.9 million cases of people who had private insurance through a large commercial insurer. The studied cases involved at least one of four specialists: anesthesiologists, pathologists, radiologists and assistant surgeons.
Researchers said these are hospital-based physicians who are often not chosen by patients prior to a procedure or health care service.
According to the study findings, specialists billed for out-of-network services in about 10% of cases overall -- and the billing amounts varied. The highest mean out-of-network charge to patients came from assistant surgeons at $7,889.
Second was $2,130 for anesthesiologists, followed by $311 for pathologists and $194 for radiologists.
Cooper said most physicians at in-network hospitals provide in-network care. The problem is the small percentage of physicians and specialists who operate as out-of-network doctors at these in-network facilities.
“And their ability to be out-of-network without us choosing them or being able to avoid them raises the cost of health care in the U.S.,” he said, “and that gets passed along to all of us in the form of higher insurance premiums.”
The study concluded that out-of-network billing by these specialists was more prevalent at for-profit hospitals and at hospitals that operated in markets with little competition.
States like New York and California have adopted their own consumer protection laws to try to end these types of surprise medical bills. In New York, insurance companies and out-of-network physicians must use arbitration to settle payment disputes.
The system was designed to protect patients from getting charged the disputed amount, a practice called balance billing. But an analysis of data released by the New York Department of Financial Services concluded that the arbitration process is making health care more expensive for the state’s residents.
California uses a type of benchmarking system in which the state, using a formula, limits the amount insurers must pay physicians for out-of-network services by calculating what other doctors are getting paid.
Cooper said solving the issue at a national level could reduce health care spending in the United States by 3.4%, or about $40 billion annually.
Lawmakers in Washington, D.C., were working on a federal law to end surprise medical bills, but that legislation was ultimately not included in a government spending package that passed in December.
