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Original Investigation
August 12, 2019

Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in In-Network Hospitals

Author Affiliations
  • 1Department of Anesthesiology, Pain, and Perioperative Medicine, Stanford University School of Medicine, Stanford, California
  • 2Department of Health Research and Policy, Stanford University School of Medicine, Stanford University, Stanford, California
  • 3Stanford Law School, Stanford, California
JAMA Intern Med. Published online August 12, 2019. doi:10.1001/jamainternmed.2019.3451
Key Points

Question  What are the incidence and financial consequences of out-of-network billing for inpatient admissions and emergency department visits?

Findings  In this analysis of 5 457 981 inpatient admissions and 13 579 006 emergency department admissions between 2010 and 2016 in a large national sample of privately insured patients, the incidence of out-of-network billing increased from 32.3% to 42.8% of emergency department visits, and the mean potential liability to patients increased from $220 to $628. For inpatient admissions, the incidence of out-of-network billing increased from 26.3% to 42.0%, and the mean potential liability to patients increased from $804 to $2040.

Meaning  It appears that out-of-network billing is becoming more common and potentially more costly in both the emergency department and inpatient settings.

Abstract

Importance  Although surprise medical bills are receiving considerable attention from lawmakers and the news media, to date there has been little systematic study of the incidence and financial consequences of out-of-network billing.

Objective  To examine out-of-network billing among privately insured patients with an inpatient admission or emergency department (ED) visit at in-network hospitals.

Design, Setting, and Participants  A retrospective analysis using data from the Clinformatics Data Mart database (Optum), which includes health insurance claims for individuals from all 50 US states receiving private health insurance from a large commercial insurer was conducted of all inpatient admissions (n = 5 457 981) and ED visits (n = 13 579 006) at in-network hospitals between January 1, 2010, and December 31, 2016. Data were collected and analyzed in March 2019.

Exposures  Receipt of a bill for care from at least 1 out-of-network physician or medical transport service associated with patient admission or ED visit.

Main Outcomes and Measures  The incidence of out-of-network billing and the potential amount of patients' financial liability associated with out-of-network bills from the admission or visit.

Results  Of 5 457 981 inpatient admissions and 13 579 006 ED admissions between 2010 and 2016, the percentage of ED visits with an out-of-network bill increased from 32.3% to 42.8% (P < .001) during the study period, and the mean (SD) potential financial responsibility for these bills increased from $220 ($420) to $628 ($865) (P < .001; all dollar values in 2018 US$). Similarly, the percentage of inpatient admissions with an out-of-network bill increased from 26.3% to 42.0% (P < .001), and the mean (SD) potential financial responsibility increased from $804 ($2456) to $2040 ($4967) (P < .001).

Conclusions and Relevance  Out-of-network billing appears to have become common for privately insured patients even when they seek treatment at in-network hospitals. The mean amounts billed appear to be sufficiently large that they may create financial strain for a substantial proportion of patients.

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