Last month, a new analysis from Yale University’s Zack Cooper, Hao Nguyen, Nathan Shekita and Fiona Scott Morton zeroed in on some of the out-of-network providers and specialists who have built up a track record of sending surprise medical bills to patients. Not surprisingly, the report notes that “the ability to bill out of network allows these specialists to negotiate artificially high in-network rates.”
Cooper and his colleagues identified some startling charges billed by these out-of-network providers that far exceeded average negotiated rates — often by three or four times the negotiated price in the same market. Simply by being able to send patients surprise bills, a subset of physicians are adding $40 billion in unnecessary costs to the health system.
Key highlights from the report include:
“Physicians with the ability to bill out of network without losing patient volume are able to negotiate significantly higher in-network payments from insurers, compared to physicians without a strong outside option. For example, on average, orthopedists performing knee replacements were paid 164 percent of Medicare rates. By contrast, in-network rates were 367 percent of Medicare rates for anesthesiologists, 343 percent for pathologists, 195 percent for radiologists, and 176 percent for assistant surgeons.”
“In the event that a patient’s insurer does not cover care delivered by an out-of-network provider, physicians will seek to collect their charges directly from patients. Mean out-of-network physician charges were 802 percent of Medicare payments for anesthesiologists, 562 percent for pathologists, 452 percent for radiologists, and 2,652 percent for assistant surgeons— or $2,130, $311, $194, and $7,889, respectively.”
Bottom line: If Congress takes action to end to surprise medical billing, employers and patients could save up to $40 billion every year.
To view the full analysis, click here.