While in-network providers agree with the plan on how much they're going to charge for services, all bets are off when out-of-network providers enter the picture. (Photo: Getty)
One factor that drives up the cost of care for those who have health insurance—even employer-provided coverage—is the presence of care from out-of-network providers. And according to a new Kaiser Family Foundation analysis, almost one in five inpatient hospital admissions—18 percent—comes with bills from providers not in the health plan's networks, which can expose patients to higher cost-sharing and perhaps even more bills from providers.
According to the analysis, it doesn't necessarily matter that workers choose in-network facilities, since 15 percent of admissions include a bill from an out-of-network provider such as a surgeon or anesthesiologist.
And since these providers can charge enrollees more than their plans are willing to cover, that means those patients could be on the hook for high out-of-pocket expenses, thanks to a practice known as “balance billing,” and can bring “surprise” medical bills if a patient didn't intend to get care from someone out of network. In addition, says the report, health insurance plans also hold the patient responsible for a greater portion of out-of-network claims.
The analysis, which sought to find out how often inpatient admissions and outpatient services brought charges from out-of-network providers, found that when emergency room use entered the picture, more out-of-network charges came along with it. In addition, according to the KFF report, “treatments for mental health and substance abuse also have a much higher chance of including a claim from an out-of-network provider, potentially reflecting difficulty in finding a participating provider.”
While in-network providers agree with the plan on how much they're going to charge for services, and plan participants sticking to in-network providers know they'll only owe the cost sharing specified under the plan, all bets are off when out-of-network providers enter the picture.
And even though under the Affordable Care Act private health plans must have a maximum limit on cost-sharing payments for a year—currently $7,350 for single coverage and $14,700 for family coverage for 2018—the report points out that this protection usually only applies to services from in-network providers.
In addition, health maintenance organizations or exclusive provider organization plans, which only cover non-emergency services in network, might not cover out-of-network care at all.
But even if a plan participant tries to do the right thing and stick to in-network providers, in emergency or urgent care situations, there may be no other choice available or the participant may not know that the anesthesiologist, for example, or radiologist or even the lab processing test results is out of network. Hence the “surprise bills.”
While outpatient claims are less likely to bring bills from out-of-network providers, they're by no means exempt; nearly 18 percent of inpatient hospital stays come with such bills attached, but 7.7 percent of outpatient “service days” (all of the claims involving a facility that are processed for a single day) do as well.
The report also cites a 2016 KFF survey of medical debt, which found that nearly 7 in 10 individuals with out-of-network bills did not know the provider was out of network at the time of service.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
