Zero out-of-network billing by 4 specialists could save $40B, study finds

If four out-of-network specialty providers — anesthesiologists, pathologists, radiologists and assistant surgeons — could no longer balance bill patients for care provided at in-network hospitals, about $40 billion in savings would be realized each year, according to a new study published in Health Affairs.

For the study, researchers from Yale University in New Haven, Conn., examined 2015 data from a national commercial insurer covering tens of millions of lives through employer-sponsored plans. The researchers analyzed rates that the four specialties billed out of network in the study period, and what would have happened if their in-network payments were reduced to 164 percent of Medicare rates.

Across the in-network hospitals included in the study, 12.3 percent of pathologist care, 11.8 percent of anesthesiology care, 11.3 percent of assistant surgeon care and 5.6 percent of radiologist care were billed out of network. Researchers estimated the mean potential balance bills for pathologists, anesthesiologists, assistant surgeons and radiologists were $177, $1,171, $7,420 and $115, respectively.

The study authors found that if these four specialties weren't allowed to bill out of network, physician payments for privately insured patients would be reduced by 13.4 percent. Ultimately, this would reduce healthcare spending for people with employer-based coverage by 3.4 percent, or $40 billion each year, according to the researchers.

Notably, the study authors found that out-of-network billing was concentrated in a minority of hospitals included in the study and was more prevalent at for-profit hospitals. Across all specialties, out-of-network billing was highest in four states: Alabama, Idaho, Mississippi and Montana.

The preferred solution offered by the researchers is regulating the contracts of physicians who work in hospitals but are not chosen by patients.

"Under this policy, hospitals would be required to sell a bundled package of services that included the fees for [emergency department] physicians, anesthesiologists, pathologists, radiologists, and assistant surgeons. As a result, for example, hospitals would bill for anesthesiology services and then be responsible for recruiting anesthesiology providers to work in their facilities. Those anesthesiologists could be employees of the hospital or independent contractors and could bargain over compensation with the hospital," the authors said.

To view the full study, click here.

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