November 16, 2016
By Gene Emery
NEW YORK (Reuters Health) - Two Yale economists are calling for states to end a practice that allows some doctors to surprise patients with large medical bills after visits to a hospital emergency room.
The bills appear when the hospital is in the patient's insurance network but the emergency physicians are not.
The result: unexpected bills that average $622, according to a new analysis in the New England Journal of Medicine by Zack Cooper and Finoa Scott Morton.
They found one person who was billed an extra $19,603 after going to an emergency room where the extra costs were added in and not covered by insurance.
Even a $622 bill is daunting when nearly half of Americans can't cover a $400 expense without borrowing money or selling assets, according to data from the Federal Reserve.
Patients "are not thinking of the bill when they need to get care and they get walloped later with a bill from a physician they didn't know, couldn't choose and couldn't avoid," Cooper told Reuters Health in a telephone interview.
"It's roughly analogous to going out to dinner, having a decent meal, paying the bill, and eight weeks later getting a $10,00 bill from the guy who served the bread. And they threaten to send us to collection if we don't pay," he said.
"It isn't just emergency care," said Cooper. "This happens for a whole lot of other things -- anesthesiologists, assistant surgeons, radiologists and laboratories. This is a vagary of how we pay for health care. But the emergency room example is particularly egregious."
In response, the American College of Emergency Physicians released a statement in which its president, Dr. Rebecca Parker, complained that "The study does not discuss that insurance companies are misleading patients by selling so-called 'affordable' policies that cover very little until large deductibles are met -- then blaming physicians for charges."
Dr. Parker also challenged the $19,603 bill and noted that Cooper and Morton didn't identify the insurance company supplying the data.
The two economists suggest that "the best solution would be for states to require hospitals to sell a bundled ED care package that includes both facility and professional fees."
"We need to say, you're an ED, you sell a bundle, you can't get away with this ridiculousness, separately setting physician and facility fees," said Cooper. "It gets to the heart of the issue. When I'm a patient, I don't choose a physician and a facility separately, I choose a bundle of care. And the idea that negotiations happen separately over two components is quite problematic. That's the market failure we need to correct."
Dr. Jim Augustine, an ACEP expert on out-of-network issues, said billing used to be a package deal until the federal government demanded separate billing in the 1970s and 1980s. What has changed, he told Reuters Health by phone, "is that the insurance companies have decreased what they will pay for and setup up narrow networks of providers."
"Insurance companies would like to have bundled reimbursement setups because it's advantageous for their contracting," he said. "It's not advantageous for the people who provide care for them."
"We want to be members of the network. But if the insurance company isn't paying for services, that becomes an impossibility," Augustine said. "And it gets very complicated and expensive for us to try to collect our bills. As an emergency physician I can't be part of every network."
Cooper and Morton said if physician costs were bundled with the cost of each emergency room visit, hospitals would determine what physicians would be paid and that agreement would be part of the emergency room package. There would be no surprise bills for consumers and it would preserve marketplace competition because if a doctor doesn't like what a hospital is willing to pay for treating patients, the doctor could work at a different hospital. Hospitals would compete by offering the best rates to attract good doctors.
Under such a system, they said, "Most crucially, patients would always be protected."
In their study, Cooper and Morton found that 22% of visits involved patient going to an in-network hospital emergency room staffed by out-of-network doctors.
The odds of that happening varied regionally. It was seen in 89% of visits in McAllen, Texas, but virtually no visits in Boulder, Colorado.
"The fact that we see places where this just doesn't happen really tells us that this doesn't really need to happen," said Cooper, an assistant professor of health and economics at Yale. "There's a lot of things that are broken in health care that we can't fix or is really challenging. This is one that's really big, that harms a lot of people, and that's really easy to solve."
The findings are being released at a time when many Americans are facing uncertainty about their health coverage. President-elect Donald Trump has pledged to replace the Affordable Care Act, commonly known as Obamacare, immediately after his inauguration in January but no detailed alternative has been proposed.
Obamacare doesn't address the issue, perhaps because until now the scale of the problem has been unknown, the researchers said.
N Engl J Med 2016.
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