Health care and consumer experts sound off on a new report by America's Health Insurance Plans detailing "exorbitant" out-of-network medical charges.
Health care services continue to hit the pocketbooks of Americans hard, with some receiving bills that list "exorbitant" prices for out-of-network medical procedures and physician visits.
A new report from America's Health Insurance Plans (AHIP), the health insurance industry's trade association, found that out-of-network providers charged, on average, at least three times more than what Medicare paid for the same procedures.
Marilyn Tavenner, AHIP's president and CEO, said the report "demonstrates the serious cost pressures facing consumers who want affordable access to care and the added financial burden caused by excessive out-of-network medical bills."
The report examined 18 billion claims and 97 medical procedures performed during 2013 and 2014 across the 50 U.S. states. While the report examined the charges billed for out-of-network medical services, it did not detail what patients actually paid for them.
For 57 out of the 97 procedures, out-of-network charges billed by providers were, on average, at least triple the Medicare reimbursements for the same services. AHIP's report also showed disparities in out-of-network charges from different providers for the same service.
In Illinois, the average out-of-network charge submitted for a cervical/thoracic spinal injection was $1,201. By comparison, Medicare reimbursements for the same procedure averaged $113. That represents the biggest gap between out-of-network charges and Medicare fees in Illinois for procedures examined in the report.
A 40-minute outpatient office visit in Illinois had the smallest out-of-network charge compared to Medicare fee in Illinois. The out-of-network charge and Medicare fee for the service averaged $255 and $148, respectively.
Chuck Bell, programs director at Consumers Union, the policy and action division of Consumer Reports, said AHIP's analysis shows how "excessive and onerous" out-of-network charges can potentially be for patients, who could be inadvertently encountering an out-of-network provider.
"Suppose you go to get a colonoscopy and the anesthesiologist is out-of-network, which is a very common story that we get. We often see a patient will be balance billed like two or three thousand dollars for anesthesiology services," Bell explained. "We see this is as sort of a harsh and unreasonable situation for the patient to be in, and we're going to continue to really press for a solution so that patients can reliably and consistently stay within their health plan network, and that they're also protected and held harmless from inadvertent out-of-network charges."
Some states are taking action on the issue.
Last year, for example, New York adopted Consumers Union-backed legislation designed to safeguard patients from "surprise" medical bills. Among other provisions, the New York measure required providers to disclose more information to patients, including the health plans in which they participate; held patients harmless from bills for out-of-network emergency room services; and established a dispute resolution process for surprise medical bills.
In other states such as California, Texas and New Jersey, legislation meant to curb surprise medical billing has passed or is under consideration.
At the federal level, the Affordable Care Act (ACA) contains few consumer protections against surprise medical billing, meaning individuals who obtained health care coverage through the law's insurance exchanges can run into such problems.
"The only exception for out-of-network charges under the ACA is for emergency services," AHIP spokeswoman Courtney Jay explained in an email.
Bell said the issue of surprise, out-of-network medical billing was not "squarely addressed" in the ACA partly because "it would have been complicated" and "provider groups in different parts of the country could have really mobilized to argue about those provisions."
"It would not have been a very easy issue to address," he said. "But is it something that affects the affordability of care? Absolutely."
There could be an appetite among federal lawmakers to tackle the issue, Bell said. He noted that some discussion is happening in Congress around the idea of legislation to protect patients against surprise, out-of-network charges during visits at in-network facilities.
Legislative pushback against surprise medical bills is "not easy politically, particularly because the Affordable Care Act has been sort of a lightening rod for political opposition for a couple years," Bell explained. "But from the public interest perspective, you can clearly argue that this is an important and sort of critical thing that the Congress really should address."
AHIP's analysis, meanwhile, has been met with some criticism.
Dr. Jane Orient with the Association of American Physicians and Surgeons weighed in on the report, raising these four points in an email to Progress Illinois:
1. Doctors may bill whatever they 'choose,' but are unlikely to collect unreasonable charges--especially if there is competition and prices are known.
2. What Medicare or networks pay is often too low to attract willing physicians. Networks may advertise services that are unavailable in network.
3. Medical costs should not ever be a secret, so there should not be surprises. Hospitals should disclose the use of non-network providers and not lead patients to believe everything is in network.
4. If independent physicians are not allowed to set their own fees, all physicians will find that fees will be less and less remunerative, and patients will see limited access to poorer care.
American Medical Association President Dr. Steven Stack also issued a statement blasting the report as "grossly misleading," as it "focuses solely on cherry-picking a handful of extreme examples of outlier charges that are skewed against Medicare's modest payment rates that have lagged behind inflation for more than a decade."
"This narrowly focused report on extreme examples taken from billions of health insurance claims filed annually should not be touted as the typical experience of the average patient. The report contains absolutely no information on the actual amount paid by patients," he added. "AHIP seems to brush off the primary role of health insurers in escalating patients' out-of-pocket costs. Narrow provider networks maintained by health insurers can force patients to seek care out-of-network and incur a greater share of the health care costs. If there is a growing problem with out-of-network billing, it's because the insurance industry has created it with ever more restrictive provider networks."