Loren Adler Associate Director USCBrookings Schaeffer Initiative for Health Policy July 18 2019 Physicians most commonly involved in surprise billing have the highest billed charges relative to Medicare rates ID: 787878
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Slide1
Why Surprise Out-of-Network Billing Occurs and How to Stop It
Loren Adler
Associate Director, USC-Brookings Schaeffer Initiative for Health Policy
July 18, 2019
Slide2Physicians most commonly involved in surprise billing have the highest billed charges relative to Medicare rates
Ratio of Charges to Medicare Allowed Amounts by Physician Type, 2016
Median
20
th
Percentile80th PercentileAnesthesiology5.512.5211.08Emergency Medicine4.652.797.50Diagnostic Radiology4.022.648.03Pathology3.432.255.10All Other Specialists2.271.464.01All Primary Care2.031.393.54
Source: Analysis of Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use Files, calendar year 2016
Slide3This market failure affects all patients through high in-network rates
Average contracted commercial payment rates:
Anesthesiologists ≈
350%
of MedicarePathologists ≈ 350% of MedicareEmergency Medicine ≈ 300% of MedicareRadiologists ≈ 200% of MedicareAverage across all physicians ≈ 125% of MedicareResults in higher premiums for all commercially-insuredSources: Stead and Merrick 2018; Trish et al. 2017; MedPAC 2017; Song 2019.
Slide4Billing Regulation
Three parts
Ban balance billing
Insurers treat OON care as in-network
Determine OON payment amountEstablishing the limit
Do not base on billed chargesCurrent contracted ratesLittle risk of setting limit too lowUneasy about arbitration, but same considerations apply
Slide5Median In-Network Rates vs.
80
th
Percentile of Charges
Source: FAIR Health, 2018-19. Data are for New York state.