A new analysis from the USC-Brookings Schaeffer Initiative for Health provides an early look at the benefits of a benchmark in expanding patient access to in-network care and safeguarding against extreme price hikes from out-of-network providers. The latest report – based on 17 million physician claims in California – is another example of the need for Congress to advance a fair, local benchmark standard to address surprise medical billing.

Highlights from the new USC-Brookings analysis are included below:

  • “Surprise out-of-network bills can occur when patients are unexpectedly treated by an out-of-network provider, either for emergency services or out-of-network services delivered at an in-network facility (such as a hospital or ambulatory surgical center (ASC)).”
  • “In such situations, the patient’s insurer often makes a payment, but the out-of-network provider can also balance bill the patient for the difference between what the insurer paid and the provider’s charges, or list price, which tends to be very high relative to any market rate. Prior studies have found that unexpected treatment by an out-of-network provider appears to occur in roughly one-in-five emergency department visits and one-in-ten elective inpatient visits to an in-network hospital.”
  • “California’s 2017 law, in particular, has been the subject of intense debate, as it bears significant resemblance to the two leading (and similar) Congressional proposals – one from the Senate Health, Education, Labor, and Pensions (HELP) Committee and another from the House Energy & Commerce Committee – that prohibit surprise balance billing and mandate a minimum payment standard from insurers for affected out-of-network services.”
  • “…America’s Health Insurance Plans (AHIP) released their own analysis in August finding an increase in the number of physicians in commercial insurance networks in California since the state policy’s implementation through July 2019. They report an average 16% increase in the number of in-network physicians across all specialties, and variation in the magnitude of increase across the hospital-based specialists most impacted by the state’s surprise billing policy – ranging from a 1% increase in the number of in-network pathologists to a 26% increase in the number of in-network diagnostic radiologists. AHIP concludes that network breadth remained flat or grew across the specialties they evaluated, with no indication of decreases in network breadth resulting from California’s surprise billing policy.”
  • In the Brookings analysis, researchers “observe a 17% decline in the share of services delivered out-of-network by the affected specialties at inpatient hospitals and ambulatory surgical centers (ASCs) when comparing a pre-policy period from January 2014 through June 2017 and a post-policy period from July 2017 through December 2018, ranging from a 15% decline for pathology to a 31% decline for neonatal-perinatal medicine.”
    “The timing and magnitude of the changes we observe provide some suggestive evidence that California’s law may have reduced the share of services delivered out-of-network by the affected specialties. Notably, such a decline in the frequency of out-of-network care after California’s 2017 law would comport with predictions from economic theory, as the law reduces the rewards to remaining out-of-network.”
  • “Notably, this drop in the frequency of out-of-network care is focused in the third-quarter of 2017 across the affected specialties, timed to the law’s implementation – that is, we also observe a 17% decline in the share of out-of-network services specifically between 2017 Q2 and 2017 Q3. By comparison, the share of emergency medicine services delivered out-of-network dropped by 5% in the period after California’s law took effect compared to before, with a 2% decline from 2017 Q2 and 2017 Q3.”

To view the full analysis, click here.