Surprise out-of-network hospital bills becoming more common, more expensive

Surprise out-of-network medical bills are becoming more common and more expensive, according to new research out of Stanford University’s School of Medicine.

In 2016, about 42% of in-network hospital visits resulted in an out-of-network bill, according to the study, which was published online Monday in JAMA Internal Medicine. Researchers estimated patients’ potential financial responsibility for hospital visits more than doubled between 2010 and 2016, to about $2,000 in 2016.

Surprise out-of-network bills arise when people turn to a hospital they know is part of their insurance plan’s network, but are treated by a doctor or provider in the hospital who does not have a contract with the insurer.

“In-network” providers agree to set rates with insurers and are not allowed to bill patients for more than their share of that contracted rate.

Providers who do not have contracts with insurers are considered out-of-network and can bill patients directly for the full cost of the service.

Medicare limits this practice, called balance billing. At least 25 states, including New Jersey, have established their own rules to protect privately insured patients. Other states and federal lawmakers are also considering legislation.

To better understand the cost and prevalence of surprise billing, Stanford researchers turned to Optum’s Clinformatics Data Mart database, which includes health insurance claims for people with private health insurance in every state.

Researchers analyzed 5.5 million inpatient admissions and 13.6 million emergency department visits between 2010 and 2016. They looked specifically at claims for in-network visits to evaluate which portion resulted in an out-of-network bill.

Researchers found that the portion of in-network hospital visits that resulted in an out-of-network bill increased from 26% in 2010 to 42% in 2016.

In the emergency department, about 43% of in-network visits led to an out-of-network bill in 2016, up from about a third of visits in 2010.

Patients’ potential financial responsibility for out-of-network ED bills was $625 in 2016, up from $220 in 2010.

The Optum database shows how much patients were billed, but does not include how much of that bill they ultimately paid, which is why researchers described the estimated cost to patients as “potential financial responsibility.”

Researchers were also unable to determine from the database whether patients knew they would receive an out-of-network bill.

But, as the Stanford study shows, the places out-of-network bills are most common are often unavoidable.

More than 80% of ambulance trips resulted in an out-of-network bill, according to the study. Emergency medicine services also had a high rate of out-of-network bills, both among inpatient admissions and ER visits.

The study was supported by grants from the National Institute on Drug Abuse and the Agency for Healthcare Research and Quality.

Eric C. Sun, an assistant professor of anesthesiology and perioperative and pain medicine at Stanford and the study’s lead author, also reported personal fees from Mission LISA Foundation, which researches opioid abuse, and Egalet Corp., a pharmaceutical company based out of Wayne, outside of the study.

Other authors reported grants from the National Institute for Health Care Management, as well as personal fees from Blue Cross and Blue Shield of California, Blue Cross and Blue Shield of Florida, and Dignity Health.