Out-Of-Network Billing And Negotiated Payments For Hospital-Based Physicians

Author(s): 

Zack Cooper, Hao Nguyen, Nathan Shekita, and Fiona Scott Morton

ISPS ID: 
ISPS19-20
Full citation: 
Cooper, Zack, Hao Nguyen, Nathan Shekita, and Fiona Scott Morton (2019). Out-Of-Network Billing And Negotiated Payments For Hospital-Based Physicians. Health Affairs. Published online 16 December 2019. DOI: 10.1377/hlthaff.2019.00507.
Abstract: 
When physicians whom patients do not choose and cannot avoid can bill out of network for care delivered within in-network hospitals, it exposes patients to financial risk and undercuts the functioning of health care markets. Using data for 2015 from a large commercial insurer, we found that at in-network hospitals, 11.8 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 ability to bill out of network allows these specialists to negotiate artificially high in-network rates. Out-of-network billing is more prevalent at hospitals in concentrated hospital and insurance markets and at for-profit hospitals. Our estimates show that if these specialists were not able to bill out of network, it would lower physician payments for privately insured patients by 13.4 percent and reduce health care spending for people with employer-sponsored insurance by 3.4 percent (approximately $40 billion annually).
Supplemental information: 

Link to article here.

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Publication date: 
2019
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