Providers Can Help Prevent Surprise Charges for Out-of-Network Care, Researchers Say

Diana Phillips

July 23, 2020

UPDATED WITH COMMENTS July 24, 2020 // Surprise medical bills are a frequent by-product of out-of-network outpatient care, and inaccurate provider directories are often to blame, a study has shown, but providers can be part of the solution, researchers believe.

In a national survey of privately insured patients who received outpatient general healthcare during the previous year, 39% of patient visits to out-of-network outpatient care providers were unexpectedly not reimbursed by insurance companies, most often because of the lack of out-of-network coverage or an unmet deductible, the authors write.

Further, for one third of survey respondents who received a surprise medical bill for outpatient services in the past year, inaccuracies in insurance provider directories were to blame.

One expert urges physicians "to be on the right side of this debate" and to "advocate" for their patients.

"Individual providers and practices need to do their best up front to contact insurance plans and confirm their in-network status when patients are making appointments," Karan Chhabra, MD, a general surgery resident at Brigham and Women's Hospital in Boston, Massachusetts, told Medscape Medical News.

"As much as physicians dislike the prior authorization process, it is actually designed to catch these issues before they happen, so doctors may want to submit a prior [authorization] before they see any new patient," he continued.

But the entire healthcare system must "work toward greater price transparency," he added.

Chhabra is also National Clinician Scholar at the University of Michigan Institute for Healthcare Policy and Innovation in Ann Arbor. He and his colleagues found that 1 in 5 elective surgeries resulted in a surprise bill.

Kelly A. Kyanko, MD, MHS, from the Department of Population Health at NYU School of Medicine in New York City, and Susan H. Busch, PhD, from the Department of Health Policy and Management at Yale School of Public Health in New Haven, Connecticut, report their findings in an article published online July 15 in the Journal of General Internal Medicine.

The scope of the problem, together with the finding that neither patient education nor income level had an influence on the likelihood of receiving a surprise bill, suggests the problem stems from system-level failures rather than patient health literacy, the authors contend.

They also believe providers can and should be part of the solution. "While patients are reasonably expected to confirm that the provider accepts their insurance before an office visit, providers — or their office staff — have a role in discussing network participation before care is delivered," they write.

Chhabra said that for physicians to establish prior authorization, it "may require more work on their end, but it is critical to ensuring that patients are not surprised when they get an out-of-network bill."

Chhabra also cautions physicians against "balance billing patients when insurance pays them less than they charged, unless they've informed the patient up front that they will receive a balance bill for any unpaid charges."

The findings are derived from a weighted sample of 1148 privately insured adults aged 18 to 64 years who had an outpatient health encounter in the past year. Of the full weighted sample, 3% reported receiving at least one surprise outpatient bill for care received, and 12% reported a directory inaccuracy.

Among those who got a surprise bill, however, 30% reported their directory had provided wrong contact information for a provider or the provider was not in network despite being listed as such. Surprise bills were no more likely to come from specialists than from primary care providers.

In recent years, there has been a push for legal limits to patients' liability for surprise medical bills. Previously proposed legislation required that individuals in private plans have access to directories with accurate information and that they be protected from costs related to directory errors.

"Other proposed remedies include increasing provider engagement and accountability for directory information and advancing directory data technology," the authors explain.

In December 2019, House-Senate compromise legislation regarding surprise billing was unveiled. The proposed legislation would use benchmark rates to settle surprise billing disputes, and it included a provision for independent dispute resolution for out-of-network claims that exceeded a certain amount, as reported by Medscape Medical News.

The objective of these and other efforts is not to overregulate provider networks but to adequately regulate them through standards for directory accuracy, insurer liability for directory errors, and ongoing monitoring, Kyanko told Medscape Medical News.

"Provider networks are an important tool if they give plans leverage when negotiating prices with providers and result in lower premiums. Yet, if patients cannot accurately identify in-network providers, networks may unfairly lead to surprise bills and increase patient out-of-pocket costs," the authors conclude.

"The fact that US healthcare providers have been able to avoid providing up-front price estimates for this long is just mind-boggling and is not the way things work in other countries or other industries," Chhabra explained.

"The current presidential administration recently issued two executive orders requiring hospitals and insurance plans to make medical costs and cost-sharing readily accessible, and hospitals have actually sued the administration in response," he continued.

"We as physicians should be on the right side of this debate, advocating for our patients to make our care affordable and accessible."

Providers and practices can do their part to lessen the likelihood of surprises as well, according to Richard L. Gundling, senior vice president of healthcare financial practices at the Healthcare Financial Management Association.

"Patient education should include as much guidance and information as possible, including information focused on avoiding surprise billing," he said. Although providers have historically shied away from discussing financial details with patients, transparency about what patients can expect empowers them and is an essential component of consumer-focused care, he explained.

The study was supported by the National Institutes of Health. The authors, Gundling, and Chhabra have disclosed no relevant financial relationships.

J Gen Intern Med. Published online July 15, 2020. Abstract

For more news, follow Medscape on Facebook, Twitter, Instagram, and YouTube.


Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.