Patient Experiences with Involuntary Out‐of‐Network Charges

Private health insurance plans with a network of approved physicians are common; in one 2011 survey, 88 percent of privately insured adults aged 18–64 years reported enrollment in a plan with a network (Kyanko, Curry, and Busch, unpublished data). While most patients remain in-network when choosing a physician, out-of-network care is not infrequent. The same survey found that 8 percent of patients who had seen a physician in the prior year had used an out-of-network physician, and an analysis of 2003 claims data estimated that out-of-network care accounted for 10–13 percent of covered expenses (McDevitt et al. 2007; Kyanko, Curry, and Busch 2012). Patients may use in-network physicians at low or no cost, and yet are responsible for higher out-of-pocket costs when using out-of-network physicians, including higher co-payments or co-insurance as well as the “balance bill” or difference between the physician's billed charge (i.e., list price) and insurer reimbursement. There is no available estimate of the average out-of-pocket cost for out-of-network care; however, these bills have the potential to be quite high as some providers’ billed charges can exceed ten to several hundred times the Medicare reimbursement rate (Americas Health Insurance Plans 2013). Seeking care from an out-of-network physician is intended to be a deliberate choice; however, approximately 40 percent of patients using out-of-network physicians experience unexpected or involuntary out-of-network charges, representing almost 3 million patients annually in the United States (Kyanko, Curry, and Busch 2012). A patient may use an out-of-network physician involuntarily in several scenarios. The insurer's physician directory may be inaccurate or not updated. A patient may not be aware that a physician was out-of-network until receiving the bill; this may be especially problematic for hospital-based physicians such as radiologists or anesthesiologists who are often not chosen by the patient. In an emergency, a patient may not be able to choose an in-network physician, or an in-network physician may not be available (Hoadley, Lucia, and Schwartz 2009; New York State Department of Financial Services 2012; Kyanko, Curry, and Busch 2012; Kyanko and Busch 2013). The frequency of involuntary out-of-network care and its potential for financial burden have spurred policy interest on both the state and federal levels (Kyanko and Busch 2013). Proposed solutions vary considerably. For example, several states have passed legislation to improve transparency by requiring that physicians disclose out-of-network status prior to delivering services (Texas SB 1731 2007; Louisiana Act No. 354 2009). The Affordable Care Act prohibits increased cost-sharing for out-of-network emergency room services, although it allows for balance billing (Federal Register 2010). Texas requires the availability of a mediator for disputed out-of-network charges (Texas HB 2256 2009). Despite the growing attention to this issue, research to inform evidence-based policy is limited. A 2012 New York State report surveyed insurers on their policies to prevent involuntary out-of-network charges, finding variation in benchmarks for calculating reimbursement for out-of-network care, available tools for calculating out-of-pocket costs, procedures to prevent use of out-of-network hospital-based physicians, and claims submission processes (New York State Department of Financial Services 2012). Another report interviewed key policy makers in four states on different regulatory approaches to protecting patients from unexpected out-of-network charges (Hoadley, Lucia, and Schwartz 2009). However, the patient experience is not represented through empirical evidence but rather is restricted to anecdotal reports (Raeburn 2009; Andrews 2011; Appleby 2012). Accordingly, we sought to characterize the experiences of patients who encountered involuntary out-of-network physician charges.