To make health care coverage more affordable, the nation must address the soaring cost of medical care that continues to rise at an unsustainable rate. Research shows that higher health care spending is a result of higher health care prices.
For consumers who choose to seek care out-of-network, our latest survey shows that the charges billed by some out-of-network providers can exceed several hundred or several thousand percent of what Medicare would reimburse for the same service in the same area.
Protecting consumers from runaway charges billed by some out-of-network physicians is an important policy issue at a time of major economic challenges and a national debate surrounding the affordability of health care.
This report provides a snapshot, state-by-state, of exorbitant charges billed by some out-of-network physicians in the 30 largest states by population. Our survey further indicated that health plans and their members routinely receive bills from physicians that are 10 to 20, or sometimes nearly 100 times higher than Medicare would allow. It illustrates the value of provider networks and a pressing problem faced by consumers who want affordable, meaningful access to out-of-network providers.
Consumers incur very high expenses when out-of-network physicians “balance bill.” As is oftentimes the case when out-of-network physicians charge the difference back to the consumer, the cost can be enormous and further limits consumers’ access to affordable care. This detracts from the ability of health plans to offer affordable access to out-of-network providers for those consumers who want the advantages of a network, but also wish to have a coverage option for out-of-network providers they may wish to use.
One tool that health insurance plans use to improve quality and make health care more affordable for consumers is the establishment of high quality provider networks. By selectively contracting with credentialed providers, health plans ensure consumers affordable access to a wide choice of high-quality doctors and hospitals. Nationally, approximately 88 percent of all claims were paid on an in-network basis in 2011.
Consumers see measurable savings when they visit contracted providers because in-network physicians are generally prohibited from charging patients the difference between billed charges and a negotiated rate. Also, consumers who receive services from in-network providers typically have lower cost-sharing obligations. Over the decades, this has saved consumers billions of dollars in out-of-pocket costs and premiums.