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The American Journal of Managed Care October 2016
Cost-Effectiveness of a Statewide Falls Prevention Program in Pennsylvania: Healthy Steps for Older Adults
Steven M. Albert, PhD; Jonathan Raviotta, MPH; Chyongchiou J. Lin, PhD; Offer Edelstein, PhD; and Kenneth J. Smith, MD
Economic Value of Pharmacist-Led Medication Reconciliation for Reducing Medication Errors After Hospital Discharge
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Patients' Success in Negotiating Out-of-Network Bills
Kelly A. Kyanko, MD, MHS, and Susan H. Busch, PhD
A Call for a Statewide Medication Reconciliation Program
Elisabeth Askin, MD, and David Margolius, MD
Postdischarge Telephone Calls by Hospitalists as a Transitional Care Strategy
Sarah A. Stella, MD; Angela Keniston, MSPH; Maria G. Frank, MD; Dan Heppe, MD; Katarzyna Mastalerz, MD; Jason Lones, BA; David Brody, MD; Richard K. Albert, MD; and Marisha Burden, MD
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Minal C. Patel, MD; Malini Chandra, MS, MBA; and Joan C. Lo, MD
Estimating the Social Value of G-CSF Therapies in the United States
Jacqueline Vanderpuye-Orgle, PhD; Alison Sexton Ward, PhD; Caroline Huber, MPH; Chelsey Kamson, BS; and Anupam B. Jena, MD, PhD
Periodic Health Examinations and Missed Opportunities Among Patients Likely Needing Mental Health Care
Ming Tai-Seale, PhD; Laura A. Hatfield, PhD; Caroline J. Wilson, MSc; Cheryl D. Stults, PhD; Thomas G. McGuire, PhD; Lisa C. Diamond, MD; Richard M. Frankel, PhD; Lisa MacLean, MD; Ashley Stone, MPH; and Jennifer Elston Lafata, PhD
Does Medicare Managed Care Reduce Racial/Ethnic Disparities in Diabetes Preventive Care and Healthcare Expenditures?
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Patients' Success in Negotiating Out-of-Network Bills

Kelly A. Kyanko, MD, MHS, and Susan H. Busch, PhD
Nineteen percent of bills for out-of-network visits were negotiated, and of these negotiated bills, individuals were successful in lowering their costs approximately half the time.
ABSTRACT

Objectives:
Out-of-network (OON) care is one area where patients might be more likely to challenge their healthcare bills due to the high out-of-pocket costs and unexpected charges related to emergency care or hospital-affiliated providers. We aimed to determine whether, and under what circumstances, patients negotiate with either insurers or providers when services are billed OON and how often patients that do engage in negotiation are successful. 

Study Design: Internet-based survey.

Methods: We conducted a 2011 Internet survey on OON care on a nationally representative sample of privately insured adults (n = 721). We considered whether patients would be more likely to negotiate OON charges by demographic characteristics and under several scenarios: emergency visits, bills from hospital-affiliated OON providers at in-network hospitals, and balance bills. 

Results: We found patients negotiated 19% of OON bills, were successful in lowering their costs 56% of the time, and were more likely to be successful negotiating with providers compared with insurers (63% vs 37%; P <.01). Men were more likely than women to be successful in lowering their costs (76% vs 50%; P <.05). OON bills for emergencies, providers at in-network hospitals, and with a balance bill were more likely to be negotiated, although bills from providers at in-network hospitals and with balance bills were less likely to be successfully negotiated.

Conclusions: Patients had low rates of success in negotiating OON bills for emergency care and for OON providers at in-network hospitals. Policy makers aiming to protect patients under these scenarios should consider policies that allow for an easily accessible, formal, and unbiased mediation process.

Am J Manag Care. 2016;22(10):647-652
Take-Away Points

Nineteen percent of bills for out-of-network (OON) visits were negotiated; of these negotiated bills, individuals were successful in lowering their costs approximately half the time. 
  • Although individual demographic characteristics were not associated with negotiation of an OON bill, we found disparities by gender and health status in whether or not an individual was successful in lowering their costs. 
  • Patients had low rates of success in negotiating OON bills for emergency care and for OON providers at in-network hospitals. Policy makers aiming to protect patients under these scenarios should consider policies that allow for an easily accessible, formal, and unbiased mediation process.
Patients who believe they have inappropriately been charged for healthcare services may have difficulty challenging these costs. They may have poor understanding of health insurance terminology, face a complex billing bureaucracy, not fully understand the nature and necessity of the care they are receiving, be vulnerable if facing serious illness, or not feel comfortable discussing money with their physician and worry it will impact their relationship. Relatively few patients formally voice concerns to their health plan, even when they believe they have been inappropriately charged a large out-of-pocket cost. Circumstances, such as socioeconomic status, patient empowerment, and chronic illness, can impact whether a patient will use their voice and have a satisfactory resolution.1 

Out-of-network (OON) care is one area where patients might be more likely to challenge their healthcare bills due to the high out-of-pocket costs of using OON care. In addition to higher cost sharing (eg, 20% of costs vs 10% for in-network providers), OON providers may “balance bill” patients the difference between their list price and the amount the provider is reimbursed by the insurer. Although there is little objective data on consumer out-of-pocket costs for OON care, reports suggest that balance bills may be quite high (and increasing) and a source of medical debt among the privately insured.2,3

Recently, attention to this issue has increased due to consumer complaints about the use of narrow networks in plans sold in state health insurance marketplaces; overall, 41% of 2014 marketplace plans were classified as small or extra small.4 An increasing number of plans are also reimbursing for OON care based on percentage of the Medicare rate (rather than the usual and customary rate), which often leads to higher balance bills.5,6 Even cost sharing may be increasing. Some high-deductible health plans do not allow OON services to apply to the general deductible, and there is evidence that deductibles for OON care are increasing relative to in-network deductibles. A PriceWaterhouseCoopers survey found that from 2009 to 2015, average OON deductibles increased by $1000 compared with a $500 increase for in-network deductibles.7

Although the majority of OON care—especially in the outpatient setting—is an informed choice, from a patient perspective, some charges related to OON services may be viewed as unfair, even if they meet the conditions of the insurance contract.8,9 In an emergency, patients may feel it is necessary to use the most easily accessible provider; however, they may unexpectedly receive bills from an OON provider at an in-network hospital. A hospital may be in-network, but providers who are hospital-based or hospital-affiliated who are treating the patient, such as anesthesiologists, radiologists, or pathologists, may not have contracts with the patient’s insurer. For example, although a pregnant patient may check before routine labor and delivery to ensure that her obstetrician and hospital are in her insurer’s network, during her labor, the epidural may be placed by an OON anesthesiologist or complications may arise and she may receive services from an OON neonatologist, which essentially would be almost impossible to refuse. Another concern relates to price transparency. If information on a provider’s price or insurer reimbursement for a service is not readily available, patients may make the decision to use an OON provider without understanding the cost implications. 

Currently, there are few federal or state protections or formal complaint or mediation processes specifically related to unexpected OON bills, leaving most patients to initiate a complaint on their own with their insurer or provider. The Affordable Care Act (ACA) partially addressed the issue of OON emergency department (ED) care on the federal level by requiring that insurers bill in-network cost-sharing rates for patients who use an OON ED. Out-of-pocket costs to these patients may still be high since balance billing by providers is still allowed.10 At the state level, patients may submit a complaint to their state for denial of services from their insurer and request an external review process; however, this process is for what is covered under the health plan and it is unclear whether patients challenging OON bills are covered under this mechanism. More recently, some state legislators have strengthened consumer protections using a variety of approaches, including requiring that the insurer, rather than the patient, pay the balance bill for unexpected OON care (sometimes referred to as "hold harmless provisions"), ensuring adequate payment for providers to deter balance billing, and requiring that providers disclose the potential for an OON bill at the point of service.11

Because of the complexity of negotiating between the insurer, provider, and patient, the use of an independent mediator has also been suggested at the state level. In Texas, in addition to disclosure rules, patients themselves may initiate the mediation process for unexpected OON bills over $500.12,13 A New York state law that went into effect April 2015 holds patients harmless from unexpected OON bills for emergencies. For other unexpected OON billing scenarios (ie, OON provider at in-network hospital), the New York law allows patients to assign their benefits to the insurer. The OON provider is then prohibited from seeking payment from the patient (except for cost-sharing amounts). After this assignment of benefits, if the OON provider and insurer disagree about reimbursement, the provider or insurer can initiate an independent mediation process.14

Little is known about how often patients negotiate OON bills and the resolution of the dispute. Consumer Reports National Research Center recently conducted a survey, which indicated that about one-third of patients have received a bill where the insurer paid less than expected, with many cases not resolved to the patients' satisfaction.15 Another study examining pre-service denials from 1998 to 2000 in 2 large HMO’s found that among pre-service denials that were appealed, approximately 1 in 5 were related to OON care, and these appeals were less likely to be won in favor of the enrollee compared with medical necessity appeals.16 Postservice appeals in the same dataset often involved failure to obtain authorization to use an OON provider.17

In this paper, we attempt to address the question of whether, and under what circumstances, patients attempt to negotiate with either insurers or providers when services are billed OON and how often patients that do engage in negotiation are successful. We conducted a national survey of users of OON care and determined what proportion self-reported that they negotiated with insurers, providers, or both, and how often they were successful. We considered whether, and which, patient or treatment characteristics predict an individual will negotiate an OON bill. We paid particular attention to those patients who report the OON service was an emergency, at an in-network hospital, or included a balance bill. 

METHODS

Data were obtained from a 2011 Internet survey on patient experiences with OON care on a nationally representative sample of privately insured English-speaking US adults aged 18 to 64 years. Detailed methods have been published previously.18 The survey was constructed and tested through cognitive interviews19 and pretesting, and then administered via the Internet by GfK Knowledge Networks. GfK’s online research panel consists of approximately 50,000 US households selected using high-quality address-based sampling methods similar to those used by US government surveys.20 Panelists are not excluded if they do not currently own a computer, and only invited individuals are included in the panel. The probability-based sampling used to construct the panel and its representativeness of the US population have been validated.21 Demographic information was provided by GfK for all individuals in the panel.

A series of screener questions was sent to 21,754 panelists to identify respondents enrolled in a private health insurance plan with a provider network who had seen a physician and/or mental health professional in the past 12 months. Enrollment was closed when a pre-determined number of panelists screened in and began the survey, resulting in a completion rate of 64% (13,900 panelists). Panelists who had used an OON provider (n = 721) took a 10-minute survey on their experiences. 

For each OON visit, we asked respondents, “Did you try to bargain with the doctor for a lower price (either before or after seeing the doctor)?” If they answered affirmatively, we asked the follow-up question, “Were you successful in bargaining for a lower price with the doctor?” Similarly, for each visit, we also asked about trying to bargain and success in bargaining with the insurance company. For patient-level analyses (Table 1 and eAppendix [available at www.ajmc.com]), patients were defined as negotiators if they negotiated with either the insurer or the provider in any of their reported OON visits. Successful negotiators were defined by having any reported success with either the insurer or the provider for any of their reported OON visits. 

We considered whether patients would be more likely to negotiate or dispute OON charges under several scenarios: emergency visits, bills from hospital-affiliated OON providers (eg, anesthesiologists, pathologists) at in-network hospitals, and balance bills. A visit was defined as an emergency if the respondent answered “Yes” to “When you went to the emergency room or were admitted to the hospital, was it for a medical emergency?” Hospital-affiliated provider OON bills were defined as inpatient or ED visits, where the hospital was reported to be in-network and the patient was unaware the provider was OON prior to receiving care. A visit was considered balance billed if the respondent answered “Yes” to “Did the doctor charge you more than what your insurance plan covered? Do not include any co-payments, coinsurance, and deductible you may have been responsible for.” Balance bills could be associated with any OON service, including informed use of OON providers and unexpected OON service use, such as for an emergency, hospital-affiliated providers at an in-network hospital, or when no in-network provider was available. For comparison, we also constructed a category for visits where none of these 3 issues were present.

All reported analyses were weighted to match the sample to the US population based on Current Population Survey data on sex, age, race/ethnicity, education, metropolitan area, Census region, and Internet access, and to adjust for panel recruitment, attrition, oversampling, and survey nonresponse. Frequencies and χ2 tests were used for categorical variables. Where relevant, we adjusted standard errors for multiple observations for individuals. Linear regression models predicting negotiation and success in negotiation controlled for education, race, gender, income, residence in an urban area, age, and self-reported health status. 

RESULTS

 
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