3 In 2020, fewer than 40% of Americans said they could afford a $1000 surprise bill. In general, in 2018, for those with unexpected bills, the median balance bill was under $500, but 13% owed more than $2000. 2 By 2017, 38% of employer-sponsored ED visits in Texas had some out-of-network billing, compared with 18% nationally. For instance, in Texas in 2013, for Humana and UnitedHealthcare patients, 56% and 45%, respectively, of their in-network hospitals had no in-network emergency department (ED) physicians. Thus, surprise bills were still quite common. Often this balance comes as a surprise to patients who did not know that they had used an out-of-network physician at an in-network hospital.Īlthough 33 states as of 2020 had banned such balance billing, 1 under the Employee Retirement Income Security Act (ERISA) of 1974, these state laws do not apply to the millions of Americans with employer-sponsored self-insured plans. The patient must pay the remaining balance of this charge, unless the patient is protected by a state balance billing ban. However, this allowed amount is often less than what the out-of-network provider charges. The insurer covers an “allowed amount,” where the insurer may, for example, pay 70% of that amount, whereas the patient pays the other 30% via a co-payment. Health plans must be prepared to manage this spike in ED visits as the No Surprises Act takes effect.įor several decades, many hospital patients have faced surprise bills because they have unknowingly used out-of-network providers within in-network hospitals. Based on an ED severity index, these extra ED visits were 9% less urgent than prior to the bans.Ĭonclusions: We predict that the federal ban will result in $5.1 billion in savings but 3.5 million more ED visits at $4.2 billion in extra spending per year, largely negating expected savings. Results: By analyzing 15 state-level bans, we find that the bans reduced spending per visit by 14% but spurred a demand response, an increase of 3 percentage points in ED visits, which wiped away the cost savings. We use a 2-part expenditure model to estimate the impact on spending. Methods: Using MarketScan data, we conduct an event study analysis and a difference-in-difference analysis of the impact of state balance billing bans on the probability of an ED visit. Study Design: We examine 16 million nonelderly, fully funded, privately insured health maintenance organization (HMO) enrollees between 20 from 15 states with balance billing bans for HMO ED visits and 16 states without bans as the control group. ![]() By studying similar state bans, we examine whether the large reduction in out-of-pocket payments under bans will have an unintended consequence of an increase in ED visits and spending. Objectives: The No Surprises Act took effect in 2022 and prevents patients from receiving unexpected emergency department (ED) out-of-network physician bills from in-network hospitals and restricts out-of-network co-payments to in-network co-payment levels.
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