Out-of-Network Billing Continues to Increase and Creates Financial Strain, Study Finds

Out-of-network billing continues to become more common for patients with private insurance even when seeking treatment at in-network hospitals, which creates a financial strain for many patients, according to study results published by JAMA Internal Medicine.

The Clinformatics Data Mart database was used to evaluate health insurance claims for individuals from the United States receiving private health insurance from a large commercial insurer. All inpatient and emergency department visits at in-network hospitals between January 1, 2010 and December 31, 2016 were considered in the data.

The data included 5,457,981 inpatient admissions and 13,579,006 emergency department admissions. Over the course of the study period, the percentage of emergency department visits with an out-of-network bill increased from 32.3% to 42.8%, while the average potential financial responsibility increased from $220 to $628.

Additionally, the percentage of inpatient admissions with an out-of-network bill increased from 26.3% to 42.0%, and the average potential financial responsibility increased from $804 to $2040, according to the results.

“Although surprise medical bills are receiving considerable attention from lawmakers and the news media, to date there has been little systematic study of the incidence and financial consequences of out-of-network billing,” noted the authors. “Out-of-network billing appears to have become common for privately insured patients even when they seek treatment at in-network hospitals. The mean amounts billed appear to be sufficiently large that they may create financial strain for a substantial proportion of patients.”

Another study, published by the American Journal of Managed Care^®, evaluated surprise medical billing and out-of-network payment standards in California. The study investigated the AB-72 OON payment standard, finding that this policy successfully protects patients in fully insured plans from surprise medical bills, demonstrating a potential solution to the increasing out-of-network billing.

“This study’s findings demonstrate that an OON payment standard incorporating contracted rates influenced the bargaining landscape for insurers and providers, affecting network breadth and in-network rates,” concluded Erin L. Duffy, PhD, MPH, study author. “Policies modeled on AB-72 can potentially effectively protect consumers in fully insured plans from surprise medical bills and offer a policy lever to influence contracted rates.”

Reference

Sun E, Mello M, et al. Assessment of out-of-network billing for privately insured patients receiving care in in-network hospitals [published online August 12, 2019]. JAMA Internal Medicine. doi:10.1001/jamainternmed.2019.3451