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NEW HAVEN, CT – Nearly a fourth of patients who sought treatment at emergency departments within their health-insurance networks were treated by out-of-network physicians and were at risk of major, unexpected expenses, according to a recent study.
The article, published in the New England Journal of Medicine, was based on data from a large commercial insurer that included tens of millions of covered individuals. The solutions offered by the Perspective piece potentially would dramatically alter the relationship between emergency physicians and hospitals.
The Yale University researchers point out that physicians working in hospitals do not necessarily have contracts with insurance companies identical to those of the hospitals where they work. As a result, a patient can go to a hospital in their insurance network, but be treated by an out-of-network physician and then be held liable for the cost, the authors note.
“Most patients with health coverage go to in-network emergency rooms and rightly expect to be treated by in-network doctors,” explained co-author Zack Cooper, PhD, assistant professor of public health and economics at the Yale School of Public Health. “Our study shows that nearly a quarter of people who visited in-network emergency rooms were exposed to potentially major costs. This is just wrong and we must do better. People should not face financial ruin from medical bills they cannot reasonably avoid.”
For the study, researchers looked at ED visits for people younger than 65 years of age that occurred nationwide between January 2014 and September 2015, ultimately focusing on 2.2 million visits covering all 50 states and more than $7 billion in spending. Results indicate that patients were charged for out-of-network care after 22% of the visits.
“This figure masks significant geographic variation in surprise-billing rates among HRRs. In McAllen, Texas, and St. Petersburg, Florida, surprise-billing rates were 89% and 62%, respectively,” the researchers explain. “In contrast, in Boulder, Colorado, and South Bend, Indiana, the surprise-billing rate was near zero, suggesting that surprise billing is a solvable problem.”
The report states that out-of-network emergency physicians charged 798% of Medicare rates, while in-network emergency physicians generally were paid at 297% of Medicare rates, according to the findings. As a result, the researchers calculated that patients were exposed to an average bill of about $622.55 if their insurer only covered in-network rates. That is well above the $400 expense which, according to the Federal Reserve, 47% of Americans could not cover without incurring credit card debt or selling assets.
Study authors propose that hospitals be required by law to sell an emergency care package that includes physician services and facility fees together. The hospital would be responsible for staffing its own emergency department and paying physicians directly.
“This solution would preserve competition among physicians, hospitals, and insurance carriers,” added Fiona Scott Morton, PhD, the Theodore Nierenberg Professor of Economics at the Yale School of Management. “Most importantly, it would ensure that when patients visit the emergency department, they aren’t surprised by expensive medical bills.”