20% of Elective Surgery Patients Receive a Surprise Medical Bill

Privately insured patients who receive care from in-network physicians may receive surprise bills from out-of-network clinicians they did not choose when undergoing common surgeries, according to a recent  published in JAMA.  

The study of 347,356 elective surgical episodes which took place between January 2012 and September 2017 among commercial insured patients who underwent common in-network surgery found that 20 percent of these episodes involved out-of-network charges. 

“These findings suggest that, in surgical settings, the problem of out-of-network billing is not restricted to a single specialty or setting. Surgical care is inherently multidisciplinary and requires a team of clinicians with payer contracts that are rarely intentionally coordinated,” researchers said in the study. 

Elective surgery patients can choose in-network surgeons and facilities in most circumstances. Rarely, they can choose other involved clinicians such as assistants, anesthesiologists, and pathologists. 

The surgeries included arthroscopic meniscal repair, laparoscopic cholecystectomy, hysterectomy, total knee replacement, breast lumpectomy, colectomy, and coronary artery bypass graft surgery. About one in five patients who underwent these surgeries received an out-of-network bill. The mean bill per episode was $2,011. 

Out-of-network bills were linked to surgical assistants in 37 percent of the episodes and anesthesiologists for an additional 37 percent of the episodes. The out-of-network bills for care provided by these providers averaged $3,633 and $1,219 per bill, respectively. 

Meanwhile, the average out-of-netwrok charge for a medical consultant, pathologist, and radiologist were $708, $284, and $321, respectively. Other clinicians saw a mean of $754.

Other key takeaways from the study included:

· Over 11 percent of anesthesiology care, 12.3 percent of care involving a pathologist, 5.6 percent of claims for radiologists, and 11.3 percent of cases involving an assistant surgeon were billed out-of-network.

· The presence of an out-of-network bill was linked to substantially higher total charges, $48,383 versus $34,300. Prevalence of out-of-network bills varied by state, from three percent in Nebraska to 46 percent in Alaska. 

· Membership of a health insurance exchange plan was connected to a substantially higher risk of out-of-network bills. About27 percent of health insurance exchange plan members received an out-of-netowkr bill compared to 20 percent of indivudals with non-exchange plans. 

The findings underscore the need for change, leader author Karen Joynt Maddox, MD, MPH stated in an editor’s note.

“[S]urgeons have an ethical responsibility to speak out against surprise billing,” the assistant professor at the University of Washington School of Medicine and JAMA associate editor wrote. “Patients generally select surgeons because they have faith that the surgeon they choose will provide them with the best possible care. This crucial trust between patient and physician will be eroded if patients discover after an operation that they must pay large sums of money to other clinicians the surgeon has involved in their care.”

Maddox and JAMA deputy editor Edward Livingston, MD, advised surgeons to “ensure that all the personnel involved in the care team that they are leading accept the same insurance plans and should consider refusing to work in facilities that allow surprise billing.” They also called on Congress to take action by passing legislation eliminating surprise medical bills. 

Out-of-network billing is common among certain specialists in hospitals and is expected to boost overall healthcare spending by $40 billion, according to a December study from Yale University. 

Researchers expressed that billing out-of-network patients for services they cannot avoid at in-network-hospitals “undercuts the functioning of healthcare markets, raises healthcare costs, and exposes patients to significant financial risks.” 

But physicians who were able to engage in out-of-network billing without losing patient volume found substantially higher in-network reimbursement rates from private insurers versus physicians who saw lower volumes. “Because these physicians have a strong outside option in negotiations, they are able to negotiate high in-network payments with insurers,” researchers said. 

But close to $7.6 billion could be saved by legislation that would end surprise medical billing, the Congressional Budget Office (CBO) reported last year. The proposal may also increase revenues by $23.8 billion and decrease direct spending by $1.1 billion from now until 2029. This totals a deficit reduction of nearly $25 billion during the period. 

“The decline in premiums would occur because the bill would require insurers to reimburse out-of-network providers on the basis of their own median rates for in-network providers on the basis of their own median rates for in-network providers. Those median rates are generally lower than the current overall average rates,” the office wrote. 

Known as the Lower Health Care Costs Act, the bill is expected to eliminate surprise medical billing by setting reimbursement benchmarks for out-of-network care. 

Hospital and physician groups have expressed concerns about the bill, raising alarm over setting benchmark rates for out-of-network care. The groups have instead sponsored proposed legislation that would establish an arbitration process for surprise medical bills.