- Surprise medical bills and charges from out-of-network physicians total to nearly $6 billion annually, putting a significant strain on patient finances and out-of-pocket medical spending, according to a recent report from UnitedHealth Group.
An analysis of healthcare costs data revealed that physicians practicing outside of a patient or hospital’s insurance network are jacking up their prices for emergency medical care. In simple terms, out-of-network physicians are charging more for their services than in-network physicians receive as compensation.
On average, an out-of-network physician makes $898 per visit. In-network physicians are compensated an average of $360 per visit, or 150 percent less than out-of-network physicians charge.
Patients are usually left liable for these costs, the report authors added. When insurance plans cover high prices for out-of-network physicians, they usually recuperate their expense by increasing premiums or instituting cost-sharing arrangements with patients.
And when a healthcare payer successfully negotiates what it and the hospital deem a fair price, the hospital will usually then engage in balance billing. Balance billing is when patients are made responsible for the remainder of a medical bill after the insurance company has paid their negotiated share.
These practices are significant factors contributing to the increasing out-of-pocket costs plaguing patients across the country.
Further, more patients are being seen by these out-of-network physicians, the report continued. Of the 44 million emergency department visits in 2017, about one-quarter were carried out by a physician who was outside of the patient’s insurance network.
The amount by which out-of-network providers inflate their prices depends on the type of care provided, the report noted. For example, a patient receiving care for abdominal pain might see a $1,000 bill from their out-of-network physician, compared to just shy of $500 from an in-network provider.
A patient presenting with breathing problems would see a bill that is 158 percent higher for out-of-network care than in-network care. And a patient complaining of a simple cut, scrape, or bruise might see a bill that is 153 percent more than an in-network physician would typically be compensated.
There is also variation in the frequency with which out-of-network physicians inflate costs. Ear infections, open wounds, the flu, and bone fractures were the most common ailments for which out-of-network physicians charged more than their in-network counterparts.
Surprise medical bills have come to the forefront as a growing healthcare industry problem. Sixty-seven percent of patients have said they worry about receiving a surprise medical bill, according to the Kaiser Family Foundation.
Thirty-eight percent of respondents reported that they are very concerned and 29 percent saying they are somewhat concerned about surprise medical bills. Only 16 percent of patients said they are not at all worried about surprise medical bills.
Unexpected bills proved an even larger concern than high premiums, high deductibles, and rising drug costs.
Worry about surprise medical bills also override financial worry about paying for other lifestyle needs such as rent or mortgage and grocery bills, the survey revealed.
Some healthcare policymakers are beginning to take action to address surprise medical bills. Draft legislation proposed in September 2018 called on better healthcare transparency that would alert patients of an out-of-network encounter before actually receiving care.
The bill would require better transparency when patients receive care from an out-of-network provider at an in-network facility. Should the patient receive treatment from this clinician, the patient may only be charged their health payer co-payment.
The clinician may not charge the patient directly; instead, clinicians must negotiate with healthcare payers, who may either pay the clinician the median charge for in-network care for that service or 125 percent of the average price in that geographic region.
The legislation calls for similar protocol when a patient receives emergency treatment in an out-of-network facility by an out-of-network provider.
“Patients should have the power, even in emergency situations when they are unable to negotiate,” said Senator Bill Cassidy, MD, (R-LA). “Our proposal protects patients in those emergency situations where current law does not, so that they don’t receive a surprise bill that is basically uncapped by anything but a sense of shame.”