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Cost-Sharing Payments for Out-of-Network Care in Commercially Insured Adults
Wendy Yi Xu, PhD; Bryan E. Dowd, PhD; Macarius M. Donneyong, PhD; Yiting Li, PhD; and Sheldon M. Retchin, MD, MSPH
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Cost-Sharing Payments for Out-of-Network Care in Commercially Insured Adults

Wendy Yi Xu, PhD; Bryan E. Dowd, PhD; Macarius M. Donneyong, PhD; Yiting Li, PhD; and Sheldon M. Retchin, MD, MSPH
This study of claims among adults covered by employer-sponsored plans revealed substantial variations in out-of-network cost-sharing payments. The growth of cost sharing for nonemergent hospitalizations is concerning.

Recent Gallup poll results suggested that healthcare costs remain the greatest financial concern to American families.28 Our study revealed rapid growth trends in cost sharing for OON care with extensive variations among states. As commercial plans leverage network strategies combined with cost-sharing tools, the consequences may include increased enrollee financial burdens.

Several findings from our study are notable. First, the prevalence of OON care in all settings decreased over time, yet cost sharing among those with OON care climbed each year before plateauing in 2017. The size and growth of cost sharing for OON care during hospitalizations was especially noteworthy. Our findings of increased cost sharing for OON care could also reflect trends in the marketplace from mergers and acquisitions. Health plans may be experiencing more restricted capacity to negotiate fees with providers for covered OON care, resulting in higher cost sharing for OON care. As the cost sharing per visit became heftier, enrollees started to decrease their use of OON care. It is also possible that over time, consumers learned to avoid OON care and those who remained using it had higher OOP spending.

The variations observed in OON cost sharing across states were remarkable, yet the cost sharing for OON care rose substantially in most states over time. One reason is that neither state nor federal efforts have systematically targeted cost-sharing burdens for OON care. For example, only 6 states established payment standards for OON care that may affect cost-sharing amounts.13 Moreover, because self-insured plans are exempted from state regulations and provide coverage for more than 60% of enrollees for employer-sponsored plans, the effects of state policies may be constrained.13 Thus, many ESI enrollees may still face excessive OON cost sharing despite regulatory efforts.

We believe that several policy changes could help to relieve the burden of cost sharing for OON care. First, patients should receive disclosures of network status by providers and facilities, regardless of the urgency. Second, the requirement of network status notification should further protect consumers from “surprise bills.” Additionally, patients could be held harmless from higher cost sharing for OON care when timely disclosures are not forthcoming. Third, states may need to reevaluate criteria for demonstrating network adequacy for commercial plans.29 Use of narrow networks may be making it difficult for consumers to access certain specialists within network.6,7 Last, consumer protections for excessive OOP cost-sharing payments for OON care must be balanced with the need for lower pricing from participating providers to address overall healthcare costs. Policy interventions addressing cost-sharing burden for in-network care (eg, annual cost-sharing caps) may be different from those targeting OON care. For example, bundled payments to hospitals from insurance plans, combined with prohibitions to balance billing, would insulate enrollees from the impacts of provider network status. On the other hand, implementing reference pricing or multiple-tier network designs could incentivize consumers to preferentially use care from in-network providers.


First, findings from our study of covered OON care reflected only a portion of the OOP costs that consumers face with OON care. We did not evaluate uncovered OON care, the balance billing amounts that consumers paid, or liable-but-unpaid cost-sharing requirements. The practice of balance billing is common, and the amounts billed to patients can be financially devastating. Further research that quantifies the amount paid for balance billing is critical for policy makers to address appropriate remedies.

Second, unobserved changes in employers that contributed claims to the database could potentially influence the trends observed. To mitigate this concern, we studied a sample that was continuously enrolled over the 6 years and, in another robustness test, we allowed the design within specific plan types to change over time in the modeling. Both robustness tests confirmed our main findings. Thus, we are confident that the potential bias from the data pool is minimal.

Third, we have no data for unobserved consumer preferences. For example, the relatively lower OOP cost sharing for OON care by HMO members may indicate that narrow-network plans push enrollees toward in-network care. However, it may also be a result of plan designs attracting enrollees who exchanged broader network availability for lower premiums and deductibles. Thus, this finding should be interpreted cautiously.

Lastly, the generalizability of our study conclusions is limited by the use of a convenience sample for analysis. For example, individuals who were excluded from analysis because of missing OON payment information were more likely to enroll in specific plan types. Nonetheless, the distribution of plan types in our study sample was similar to what was found in national employer benefit survey data.22-27 Therefore, we believe that the associations we observed between plan type and OON cost sharing are valid and policy relevant.


Although rates of OON care in commercially insured adults decreased from 2012 to 2017, we observed that cost sharing rose rapidly from 2012 to 2016, before slowing in 2017. The cost sharing for OON care during nonemergent hospitalizations was particularly noteworthy given the amount and growth. Consumers should be informed of provider network status at the point of care. In cases of nondisclosure, whether intentional or inadvertent, patients should be held harmless from higher cost sharing for OON care. State policies, such as closely monitoring plan network adequacies, would also help alleviate financial burdens. We conclude that health plans that leverage networks to lower costs must be balanced with the potential need for broader consumer protections.

Author Affiliations: Division of Health Services Management and Policy, College of Public Health (WYX, MMD, YL, SMR), and Division of General Internal Medicine, Department of Medicine, College of Medicine (WYX, SMR), and Division of Pharmacy Practice and Science, College of Pharmacy (MMD), The Ohio State University, Columbus, OH; Division of Health Policy and Management, School of Public Health, University of Minnesota, Twin Cities (BED), Twin Cities, MN.

Source of Funding: Office of the President, The Ohio State University.

Author Disclosures: Dr Retchin is a member of the Board of Directors of Aveanna Healthcare, a privately owned pediatric home care company (no direct conflict), and owns stock in UnitedHealthcare. The remaining authors report 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 (WYX, SMR); acquisition of data (WYX, YL, SMR); analysis and interpretation of data (WYX, BED, MMD, YL, SMR); drafting of the manuscript (WYX, BED, MMD, SMR); critical revision of the manuscript for important intellectual content (WYX, BED, MMD, SMR); statistical analysis (WYX, YL, SMR); obtaining funding (WYX, SMR); administrative, technical, or logistic support (WYX, SMR); and supervision (WYX).

Address Correspondence to: Wendy Yi Xu, PhD, Division of Health Services Management and Policy, College of Public Health, and Division of General Internal Medicine, Department of Medicine, College of Medicine, The Ohio State University, Cunz Hall 208, 1841 Neil Ave, Columbus, OH 43210. Email:

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