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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
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Patients' Success in Negotiating Out-of-Network Bills
Kelly A. Kyanko, MD, MHS, and Susan H. Busch, PhD
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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.
The final sample included 721 individuals aged 18 to 64 years with private health insurance who had used an OON physician or mental health professional within the last year, representing a total of 1081 OON visits/bills (662 outpatient and 419 inpatient) as some individuals reported use of more than 1 OON provider. Overall, 19% (n = 177) of the bills for OON visits were negotiated by individuals with either the insurer or the provider, 14% were negotiated with the provider, and 10% with the insurer (Figure [A]). In 5% of visits, individuals negotiated with both the insurer and provider (data not shown). Of the negotiated bills, individuals were successful in lowering their costs about half of the time, and were significantly more likely to be successful when negotiating with providers compared with insurers (63% vs 37%; P <.01) (Figure [B]). 

Approximately 22% of individuals who used OON providers negotiated an OON bill with the insurer or provider, and 58% were successful in reducing their costs for at least 1 of the bills (Table 1). An individual’s demographic characteristics were not significantly associated with whether or not they negotiated a bill. However, men were more likely than women (76% vs 50%; P <.05) and those in good health versus poor health (63% vs 25%; P <.01) to be successful in lowering their costs. These differences persisted after adjusting for education, race, income, age, and residence in an urban area (eAppendix Table).

Table 2 presents subsets of OON visits where we hypothesized individuals would be more likely to negotiate their OON bill: emergency care, use of an OON provider at an in-network hospital, and visits for which the individual was balance billed. We compared the proportion of visits negotiated, and of these, the proportion successful in lowering their costs, to the comparison group of visits in which none of the 3 issues were present. OON visits for emergencies at an in-network hospital and visits with a balance bill were significantly more likely to be negotiated (21%, 40%, and 34%, respectively) compared with the group with none of the issues studied, where only 10% of visits were negotiated. Somewhat surprisingly, success rates for OON care at in-network hospitals and those with balance bills (37% and 48%, respectively) were significantly lower than among the comparison group (74%).

DISCUSSION

In this study, we found that 19% of bills for OON visits were negotiated, and 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. We also found patients were more likely to negotiate if a bill was related to OON care in an emergency, at an in-network hospital, or if there was a balance bill; although for bills at in-network hospitals and balance bills, these negotiations were less likely to be successful compared with bills where no observable issue was present.

Unexpected OON bills due to emergency care or from hospital-affiliated providers at in-network hospitals are unique for patients because they can find themselves in a difficult triangle between their insurer and their provider, where it may be unclear who is responsible for the higher costs. Insurers argue the use of networks can reduce healthcare premiums and that insurers should not be responsible for higher reimbursement to providers, particularly specialists, unwilling to accept a “market” rate. In the case of use of OON providers practicing at in-network hospitals, insurers may argue in-network hospitals have the responsibility to ensure an in-network provider is available when necessary (eg, anesthesiology). Conversely, providers might believe insurers are not offering a “fair” rate for their services, or that insurers too frequently deny or impose administrative hassle over medically necessary services, necessitating they not participate in networks to provide the highest quality care for their patients. In most states, the patient is ultimately responsible for the bill and the responsibility to negotiate with insurers/providers over bills perceived as unfair. 

This study supports the concern that some patients are not aware of their ability to dispute these unexpected OON medical bills. A 2015 Consumer Reports survey found that the majority of respondents were unsure if state resources were available to dispute insurer coverage denials, and they were unaware of the state agency tasked with handling health insurance complaints.15 In Texas, patients must be informed of their right to mediation when they are balance billed more than $1000 (this amount was lowered to $500 as of September 1, 2015); yet, in 2014, only 900 cases were filed for mediation—1 of which went to actual mediation—and stakeholders have expressed concern that patients are not aware of their rights.11

It is not surprising that individuals who report OON care in an in-network hospital were more likely to negotiate these bills. Providers and insurers did not seem particularly responsive to patients' concerns about these issues, with less than half resolved to the patients’ satisfaction; it is possible, however, that the billing was valid under the terms of the contract, even if the patient views them as “unfair.” This suggests an area that regulators may want to focus on to ensure patients are treated fairly. We also found high rates of success among the group of negotiators with no observable issue studied, which may be because those that attempt to negotiate in this situation are negotiating prior to informed OON care and, if unsuccessful, opt to remain in-network or have an idiosyncratic issue that insurers or providers perceive as valid (eg, no in-network provider available). 

Although we did not find any differences by demographic characteristics in who negotiated an OON bill, we did find disparities in achieving success with negotiation among women and those in poor health. That those in poor health are less likely to be successful in negotiating is consistent with prior literature1,22—they may have competing priorities with their health, impaired physical or mental capabilities, and more medical bills overall to manage. We cannot conclude there is any gender bias on the part of insurers or providers from these data; however, the fact that women are equally likely to attempt to negotiate as men but are much less likely to be successful raises concerns, particularly in conjunction with evidence of gender disparities in economic negotiation outcomes in other contexts.23 If additional research indicates these differences are truly due to gender, and not other unobservable characteristics, this further suggests changes to the appeals process are needed.

Limitations

This study has several limitations. As with all survey research, this study is subject to nonresponse and recall bias, although the use of weights (adjusting for Internet usage, panel recruitment and attrition, and nonresponse), a short recall period (12 months), and use of cognitive interviewing to eliminate questions that could not reliably be answered by self-report, partially alleviate these concerns. However, for some variables, such as whether the patient was balance billed and whether the hospital was in-network, a significant number of respondents were still unsure of their responses (30% and 21%, respectively). Another limitation is sample size, limiting power to detect differences and perform subgroup analysis on whether the patient negotiated with an insurer or a provider.

Due to time constraints with the survey, we were unable to describe important details around the negotiation, thus limiting what conclusions can be drawn from our data. Some bills may not have needed to be negotiated by the patient; for example, an insurer may pre-emptively hold a patient harmless from OON costs of emergency care, requiring no action by the patient. We were also unable to characterize whether the negotiation was around a balance bill or cost sharing, such as co-payment or deductible. We never asked specifically about why a patient negotiated the bill, and we could not determine whether the complaint was objectively legitimate. Additionally, we were unable to determine whether the negotiation was informal bargaining with the provider either before or after the visit or a formal appeal through the insurer for coverage denials. However, for emergency and inpatient care at an OON hospital, we can assume that the negotiation was after receiving an unexpected OON bill. Although additional information would have been useful to provide more context to the results presented here, we believe our data are still useful and indicate there is a need for more research in this area.

Because this survey focused on OON care, we are unable to compare against rates of negotiations/success for in-network care. Our data were collected in 2011, prior to implementation of policies established by the ACA to curtail balance billing in emergency care, as well as several state-level policies to protect and assist patients in mediation of unexpected OON charges.

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. The recently implemented New York state law excludes the patient from the negotiation process between the insurer and the provider after assignment of benefits, and outcomes should be evaluated and compared with other state models, such as Texas (which requires the patient to initiate the negotiation). At a minimum, patients should be better educated on their right to appeal and state resources available to them. Also, current available estimates of balance bill amounts are based on list price and allowed amounts.3 Our finding that a significant number of OON bills were negotiated suggests that these estimates may not be accurate, and future studies are needed to define the actual out-of-pocket burden for OON care. 

Use of OON care, both informed and unexpected, may only increase as insurers adopt the use of narrow networks as a way to potentially reduce healthcare costs.24-26 Policy makers will need to rapidly adopt both measures to prevent unexpected bills, such as accurate provider directories, patient education, and network adequacy standards, as well as protect patients from burdensome unexpected OON charges if they do occur.   

Author Affiliations: Department of Population Health, New York University School of Medicine (KAK), New York, NY; Department of Health Policy and Management, Yale School of Public Health (SHB); New Haven, CT.

Source of Funding: This study was supported by a grant from the Women’s Health Research at Yale Pilot Project Program and funding from the Yale Robert Wood Johnson Foundation Clinical Scholars Program. The sponsors were not involved in the design and conduct of the study; collection, management, analysis, and interpretation of the data; and preparation, review, or approval of the manuscript. 

Author Disclosures: Dr Kyanko has accepted consulting fees from the Consumers Union, a nonprofit organization dedicated to consumer protection. These consulting activities are in topic areas outside of the submitted manuscript, but the entity may be perceived to have interest in the manuscript content. Dr Busch reports no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (SHB, KAK); acquisition of data (SHB, KAK); analysis and interpretation of data (SHB, KAK); drafting of the manuscript (SHB, KAK); critical revision of the manuscript for important intellectual content (SHB, KAK); statistical analysis (SHB, KAK); provision of patients or study materials (KAK); obtaining funding (SHB, KAK); administrative, technical, or logistic support (SHB, KAK); and supervision (SHB).

Address Correspondence to: Kelly A. Kyanko, MD, MHS, Department of Population Health, New York University School of Medicine, 550 1st Ave, TRB 6th Fl, Rm 646, New York, NY 10016. E-mail: kyanko.kelly@gmail.com.
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