Surprise bills surge in ER, inpatient settings, JAMA finds

By | August 12, 2019

Dive Brief:

  • The frequency and price tags on surprise medical bills for emergency and inpatient services at in-network hospitals is on the rise, according to a study published Monday in JAMA Internal Medicine.
  • The percentage of emergency department visits resulting in a surprise bill jumped from 32.3% in 2010 to 42.8% in 2016 while the increase for inpatient admissions went from 26.3% to 42%. The cost of the bill in both categories nearly doubled in that time period, with the top 10% of ED visits resulting in a bill of more than $ 1,000, and the top 10% of inpatient visits costing more than $ 3,000.
  • Patients at some hospitals were far more likely to receive a surprise bill. For inpatient, the chance was less than 10% at about half of the nearly 3,300 hospitals included, but the chance was more than 90% at about 15% of hospitals. For ED visits, it was a greater than a 90% chance at 23% of at the more than 4,000 hospitals studied.

Dive Insight:

Few defend the practice of surprise billing. Study authors note the ability to receive care from an out-of-network doctor could in theory provide flexibility for patients, but that doesn’t hold up when the patient isn’t aware a doctor treating them isn’t in network — providing the “surprise” aspect.

Out of network billing “appears to have become common,” according to the study author, noting the average amount of these bills is “sufficiently large that they may create financial strain for a substantial proportion of patients.”

The new research adds to the growing evidence surprise billing is becoming more prevalent. The Trump administration backs legislation to ban the practice, and several proposals are making their way through Congress, but there isn’t yet a concrete path. Lawmakers in Washington won’t pick up the issue again until after the summer recess at the earliest.

In an editorial accompanying the study, JAMA Internal Medicine Editor at Large Robert Steinbrook called on lawmakers to take action. “Congress and the Trump administration have the opportunity to solve the problem of surprise medical bills and move on to more far-reaching reforms to improve U.S. health care and decrease its costs,” he wrote.

Provider and payer lobbyists have been pushing back against the various efforts. Hospital and doctor organizations have railed against proposals, such as the main Senate HELP committee draft, which sets a payment standard for out-of-network services.

They argue such rate setting would skew the balance of power in private negotiations. One recent study of California’s ban supported this idea, as interviews with stakeholders showed a perception that leverage in negotiations shifted to payers after the law was implemented and drove provider consolidation. Some policy analysts said, however, that outcome could be a necessary correction to an unbalanced market.

The JAMA researchers, all from the Stanford University School of Medicine, looked at 5.5 million inpatient admissions and 13.6 million emergency department visits for privately insured patients across all 50 states between 2010 and 2016 using Optum’s Clinformatics Data Mart database. Optum is owned by UnitedHealth Group, the nation’s largest private insurer.

Other research has shown the pervasive effects of surprise billing. A Health Care Cost Institute report from March found that 15% of in-network hospital admissions had at least one out-of-network professional claim, with varying levels by specialty and location.

A USC-Brookings Schaeffer Initiative for Health Policy analysis showed about 20% of ER visits involved an out-of-network provider, and the Kaiser Family Foundation has found about 40% of Americans have reported receiving an unexpected medical bill.

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