Most common source of surprise medical bills? Lab work.
According to a recent study, 6% of lab tests resulted in surprise bills, followed by 5% of bills for ER services.
Out of network billing—also known as “surprise medical billing”—is most often due to billing for laboratory services, a new study in JAMA Internal Medicine.
Surprise medical billing has become a big issue for American consumers, and Congress recently passed the “No Surprises Act” to address the issue. The new law aims to end surprise medical billing for consumers, but does not go into effect until next year, with regulatory issues being worked out this year.
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The Kaiser Family Foundation, in an analysis of the new law, noted that it remains to be seen how it is implemented. KFF also noted that consumers often do not understand their rights to appeal or question medical billing.
Lab work is the highest-volume medical activity
The JAMA study found that clinical laboratory services are the most common medical activity in the U.S, with more than 14 billion tests conducted each year—and 70% of medical decisions reliant on such tests. Medical tests may be conducted in a primary care setting, but samples are often sent to independent laboratories, without the patient being aware of whether those labs are in-network.
As a result, out-of-network billing is most common with lab work. The JAMA study found that 6% of lab tests resulted in surprise bills, compared to 5% of bills for ER services, or 3.4% of billing for anesthesiology services. Considering how much more common lab work is than things like anesthesiology services, the disparity was significant. “Out-of-network laboratory services were five times more common than out-of-network emergency department visits and 34 times more common than out-of-network anesthesiology services,” the study said.
Higher costs may lead to patients avoiding medical care
The study points out what other research has found—that such surprise billing can create a financial burden that discourages consumers from seeking medical care. “Financial barriers for laboratory tests may have adverse effects on patient health and finances, including avoidance of needed tests,” the JAMA report said. “These concerns are heightened by evidence that laboratory testing constitutes the fastest-growing out-of-network spending.”
The study outlines several ways that consumers are charged for out-of-network lab work, including physicians who are in-network but use out-of-network labs; lab work that the health system doesn’t have facilities for, resulting in sending it to an out-of-network lab; or out-of-network billing if the patient, for whatever reason, seeks an out-of-network provider.
In addition, different scenarios may require different approaches, such as in the case of a patient voluntarily choosing an out-of-network provider, where it may be appropriate to ask the patient to pay out-of-network costs. But in all cases, the study said, patients should have options and be made aware of the possible impact on their billing.
The study noted that most of the debate around surprise medical billing has focused on provider services such as anesthesiology or ambulance services. It said its findings—that lab work is a much more common source of surprise billing—suggest that as the No Surprises Act goes through the rule-making process, policymakers should pay close attention to lab billing in their attempt to address this issue.
“Although the US Congress recently passed legislation protecting patients from out-of-network bills when they unknowingly receive out-of-network care, laboratory services have not been a major component of the policy debate,” the study said. “These findings suggest that there is a need to ensure that polices and regulations protect patients from financial burden associated with out-of-network laboratory services.”
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