1 in 7 patients receive surprise medical bills

Roughly 1 in 7 patients—or 14.5 percent of hospital admissions in the U.S.—experience surprise medical billing despite seeking care at an in-network facility, according to an analysis by the Health Care Cost Institute (HCCI).

Surprise billing, which typically occurs when a patient checks into a care center covered by their insurance but is ultimately billed for care delivered by an out-of-network professional or service, has been a point of contention in the healthcare system in recent months. Texans have been so overwhelmed with surprise medical bills they’re requesting mediation from the Texas Department of Insurance, and patients in other corners of the country are facing unplanned charges of up to $474,725 for necessary care.

HCCI researchers led by Kevin Kennedy undertook a study of 620,000 in-network inpatient admissions and all associated professional claims across 37 states and the District of Columbia. Their analysis of the 2016 data concluded 1 in 7 patients experienced at least one out-of-network professional claim despite receiving care at an in-network hospital.

There was substantial variation in surprise billing across state lines—the practice was most prevalent in Florida (26.3 percent), where surprise bills were 15 times more common than in Minnesota, the state with the lowest prevalence (1.7 percent). Other states with higher percentages included Kansas (24 percent), New Jersey (22 percent) and California (22 percent).

Surprise bills were most frequent in anesthesiology, where prevalence reached 16 percent, followed by primary care (13 percent), emergency medicine (11 percent) and radiology (8 percent).

Kennedy et al. also reported that although anesthesiology might be the medical specialty with the greatest proportion of surprise bills, independent lab procedures were responsible for 22.1 percent of out-of-network claims. Emergency medicine resulted in surprise bills second-most often—12 percent of the time—while hematology and oncology procedures were least likely to be billed out-of-network (1 percent).

“Healthcare markets have certain features—namely, a host of situations in which patients have limited scope for choice—that allow otherwise pernicious behavior to persist,” Benedic N. Ippolito and David A. Hyman wrote in a paper published March 20 in AEI Economic Perspectives. “Surprise medical bills are one of those problems that should be addressed through regulation.”

Ippolito and Hyman, a research fellow at the American Enterprise Institute and a law professor at Georgetown University, respectively,  suggested a host of corrective options like increased transparency efforts, contracting reforms and target rate regulation to mitigate the issue.

“We encourage policymakers to consider the least invasive option available for the specific situation under consideration,” they wrote. “In particular, wherever possible, we urge policymakers to use contracting reforms in lieu of rate setting or arbitration. Doing so solves the fundamental problem generating surprise bills and reduces the potential for unintended consequences.”