New year, new health policy research. To kick off 2020, researchers published studies on out-of-network (OON) billing from hospital-based physicians, the Affordable Care Act’s (ACA) effect on racial and ethnic access disparities, health care market consolidation, and 2020 marketplace premiums and insurer participation.
Cooper Z, et al. Out-of-Network Billing and Negotiated Payments for Hospital-Based Physicians. Health Affairs, January 1, 2020. Research has shown that 20 percent of in-network emergency department visits involve an out-of-network physician. Yale University researchers teamed up to study 2015 data from a large commercial insurer. They evaluated the prevalence of out-of-network billing for certain hospital-based physicians that consumers do not have a choice in (such as anesthesiologists, pathologists and radiologists), and how such bills affect the rates insurers negotiate with physicians, and ultimately, the impact for consumers.
What It Finds
- In the dataset analyzed, for situations where the patient could not choose their hospital-based physician at an in-network hospital, the prevalence of OON billing was 12.3 percent for cases involving radiologists, 11.8 percent for cases involving anesthesiologists, 11.3 percent for cases involving assistant surgeons, 5.6 percent for cases involving radiologists, and 0.9 percent for cases involving orthopedists performing knee surgeries at an in-network hospital.
- OON billing was concentrated in a minority of hospitals. For example, the hospitals with less than two percent of OON billing for anesthesiologists made up 64 percent of hospitals in the data sample.
- The mean OON charges as compared to Medicare rates for the studied specialists ranged from 802 percent for anesthesiologists, 562 percent for pathologists, 452 percent for pathologists, 452 percent for radiologists, and 2,652 percent for assistant surgeons. According to the researchers, these OON bills could result in balance bills to the consumer for as high as $1,171 for anesthesiologists, $177 for pathologists, $115 for radiologists, and $7,420 for assistant surgeons (based on the difference between median in-network payments and physician charges).
- The ability to bill services as OON inflates standard in-network rates; if OON billing were eliminated, physician payments for privately insured would be reduced by 13.4 percent and health care spending for people with employer-sponsored insurance by 3.4 percent.
Why It Matters
Surprise bills are a hot topic on Capitol Hill and in the states, and for good reason. Consumers feel the effects of OON billing, both from balance bills from OON physicians and through increased premiums due to inflated in-network negotiated rates. This study highlights important issues in out-of-network billing that balance billing legislation needs to address.
Baumgartner J, et al. How the Affordable Care Act Has Narrowed Racial and Ethnic Disparities in Access to Health Care. The Commonwealth Fund, January 16, 2020. While the ACA expanded health insurance coverage to individuals and families across the country, research is still needed in order to understand the extent to which the law reduced health care disparities between racial and ethnic groups. Researchers with the Commonwealth Fund analyzed data from the American Community Survey and the Behavioral Risk Factor Surveillance System between 2013 and 2018. To assess the impact of the ACA on racial and ethnic disparities in health care access, they examined differences in the proportion of black, Hispanic, and white nonelderly adults who are uninsured; the proportion of individuals who forewent health care because of cost in the past 12 months; and the proportion of individuals with a usual source of care.
What It Finds
- The gap between the uninsured rates narrowed by 9.4 percentage points between white and Hispanic nonelderly adults, and by 4.1 percentage points between black and white nonelderly adults. All studied groups, however, have seen a slight increase in uninsured rates among nonelderly adults since 2016.
- The percentage of nonelderly adults that reported avoiding care due to cost in the last year fell across all groups.
- In contrast to pre-ACA coverage rates, in 2018, black nonelderly adults in states that expanded Medicaid were less likely to be uninsured and more likely to have a usual source of care than white nonelderly adults in states that chose not to expand Medicaid, but black working-age adults disproportionately live in states that have not expanded the program.
- Hispanic nonelderly adults were much more likely to be uninsured in both expansion and non-expansion states, despite significant coverage gains.
Why It Matters
The ACA’s reforms to expand coverage decreased disparities across communities that historically experience gaps in access to health care. However, almost a decade since the law’s enactment, notable disparities still persist. While we celebrate the ACA’s achievements on its 10th anniversary, policymakers still have work to do to eliminate remaining inequities.
Berenson, R, et al. Addressing Health Care Market Consolidation and High Prices. Urban Institute, January 13, 2020. Consolidation is common in health care markets across the country. Researchers with the Urban Institute conducted a literature review and evaluated state efforts to introduce competition into provider markets and regulate prices. The report is broken up into three categories of state policy:
- Promoting transparency
- Regulating consolidation and promoting competition
- Overseeing and regulating prices
What It Finds
- All-Payer Claims Databases (APCD), which aggregate claims data to inform policymakers and potentially permit consumers to make price comparisons, are limited due to the inability to require self-insured employers to disclose paid amounts to the state database, leading states to lose valuable data from nearly one-third of the population. However, APCDs still seem to have a downward effect on provider prices, perhaps due to increased transparency that highlights wasteful spending, geographic price variation and low-value providers. For example, the New Hampshire APCD contributed to savings of $7.9 million for individuals and $36 million for insurers over five years.
- The structure and scope of an attorney general’s oversight authority have a major impact on the extent to which a state can effectively oversee and regulate their respective health care markets. The siloing of divisions within an attorney general’s office may cut off communication and the flow of information.
- Gaps in federal authority to enforce antitrust law leave room for states to regulate anticompetitive behavior. For example, unlike federal authorities, states can consider charitable trust doctrines, consumer protections, and public interest when assessing the behavior of health care entities. States can also take preventive action such by implementing consent decrees, certificates of public advantage (COPAs), and/or price regulation via a public option plan.
- States have authority to implement cost-controlling policies to varying effects, such as Certificate of Need laws, state-based commissions that examine and propose solutions for drivers of health care costs, insurance rate review, limiting provider prices in public employee insurance programs, and hospital rate review methods.
Why It Matters
It is important to note that states have limited ability to fully regulate their health insurance markets due to ERISA. However, states should not (and in many cases, do not) wait on the federal government to take action. This study provides a range of state policy options, examples of best practices, and areas of further study for state policymakers to address consolidation in a way that promotes cost savings and consumer protections.
Holahan, J, Wengle E, and Elmendorf, C. Marketplace Premiums and Insurer Participation: 2017-2020. Urban Institute, January 15, 2020. Every year, the Urban Institute provides a detailed overview of how the individual market is evolving. In a new 2020 edition, researchers compare premium prices and market participation over three years to see how federal and state action affected the individual market across the states.
What It Finds
- Federal uncertainty and major regulatory changes in 2017, including threats to overturn the ACA and the termination of cost-sharing reduction (CSR) payments to insurers, caused substantial increases in premiums nationally; the average lowest-cost silver premiums from $342 to $443, or by 29.7 percent between 2017 and 2018.
- Average lowest-cost silver premiums went down in 2019 (0.4 percent) and 2020 (3.5 percent), suggesting a stabilizing individual market, and indicating that insurers overcorrected their individual market premiums for 2018 in the wake of federal actions in 2017.
- State action to mitigate federal uncertainty through reinsurance programs were associated with lower premium rates.
- In 2018, more insurers exited the market than entered. In 2019, many insurers reentered the marketplaces, and in 2020, many more insurers entered the marketplaces than exited, returning to slightly higher than 2017 rates of participation of plans per region (3.9 in 2020, compared to 3.8 in 2017).
- While the average lowest-cost silver premium is $426 across all states, it exceeds $550 in six states. These states share certain characteristics, including one dominate insurer and certain regulatory conditions like the continuation of grandmothered plans, the sale of 364-day short-term limited duration plans (STLDs), and a lack of regulations for health care sharing ministries.
Why It Matters
The ACA marketplaces went through growing pains in its first years of implementation, but showed signs of stabilization in 2017. After federal actions to undermine the law caused widespread uncertainty, the ACA’s marketplaces struggled once again to remain competitive in both price and participation. Still, the marketplaces have shown resilience, in part due to state policy efforts. To ensure continued stability and expand enrollment, policymakers should look to best practices that drive competition, reduce premiums, and encourage more people to become insured.