The Out-of-Network Benefit: Problems and Policy Solutions

Delivery system emergency department capacity and its effect on nonsystem service utilization

BACKGROUND

Emergency department (ED) use is often seen as a source of excess health care spending, prompting managers to limit ED capacity in their health systems. However, if limited ED capacity in a delivery system leads patients to seek emergency care elsewhere, then health care quality and efficient management may be compromised within the system.

OBJECTIVE

The objective of this study was to explore the effect of the Veterans Health Administration (VHA) in-house ED clinician capacity on VHA community care (CC) ED claims.

METHODS

We used administrative data from the VHA to identify CC ED claims and Department of Veterans Affairs emergency physician (EP) capacity for 2014-2019. We used quasi-experimental instrumental variables approach with two different instruments: percent weekday federal holidays and VHA EP full-time equivalents (FTEs). We controlled for VHA ED variables such as ED wait times (door to triage, door to doctor, and door to admission) and demand variables such as alternative insurance coverage, driving time to VHA care, and demographic variables (employment, age, household income, race, gender, and VHA priority status).

RESULTS

After instrumenting for capacity with percent weekday federal holidays, we found that one clinic-day capacity (one 8-h ED shift) per 10,000 enrollees increase at the VHA ED will result in a reduction of 61 CC ED claims per 10,000 enrollees. After instrumenting for capacity with EP FTE, we found that one clinic-day capacity (one 8-h ED shift) per 10,000 enrollees increase at the VHA ED will result in a reduction of 48 CC ED claims per 10,000 enrollees. Both of these results are statistically significant at p < 0.001.

CONCLUSIONS

Our findings imply that offering more in-house ED care, in the form of clinician capacity, can substantially reduce out-of-system ED use. The results may be of interest to integrated health care system managers who prefer their patients to stay within network.

The association of insurance plan characteristics with physician patient-sharing network structure

Professional and social connections among physicians impact patient outcomes, but little is known about how characteristics of insurance plans are associated with physician patient-sharing network structure. We use information from commercially insured enrollees in the 2011 Massachusetts All Payer Claims Database to construct and examine the structure of the physician patient-sharing network using standard and novel social network measures. Using regression analysis, we examine the association of physician patient-sharing network measures with an indicator of whether a patient is enrolled in a health maintenance organization (HMO) or preferred provider organization (PPO), controlling for patient and insurer characteristics and observed health status. We find patients enrolled in HMOs see physicians who are more central and densely embedded in the patient-sharing network. We find HMO patients see PCPs who refer to specialists who are less globally central, even as these specialists are more locally central. Our analysis shows there are small but significant differences in physician patient-sharing network as experienced by patients with HMO versus PPO insurance. Understanding connections between physicians is essential and, similar to previous findings, our results suggest policy choices in the insurance and delivery system that change physician connectivity may have important implications for healthcare delivery, utilization and costs.

Out-Of-Network Spending Mostly Declined In Privately Insured Populations With A Few Notable Exceptions From 2008 To 2016

While out-of-network or potential "surprise" billing has garnered increasing attention, particularly in emergency department and inpatient settings, few national studies have examined out-of-network care overall or in other settings. We examined out-of-network spending and use among two large nationwide populations with employer-sponsored insurance. In a primary sample of 27,883,040 people in data for 2008-16 from the Truven MarketScan Commercial Claims and Encounters Database, we found that the unadjusted share of total spending that occurred out of network decreased from 7.0 percent in 2008-10 to 6.1 percent in 2014-16, an adjusted average decline of 0.10 percentage points per year. Using a secondary sample of 13,093,209 people in the Health Care Cost Institute database provided qualitatively similar results, including when provider charges (upper bound for balance billing) were used in place of observed out-of-network prices. In subgroup analyses of the primary sample, the share of out-of-network spending was stable or declined among all segments of care except hospitalist services, pathologist services, and laboratory tests across the study period. Out-of-network use demonstrated comparable patterns. Prices were higher out of network than in network. Policy makers should focus their efforts on protecting consumers from balance billing or potential surprise billing in clinical scenarios where patients often have little choice over their provider.

Geographic Variation in Costs of Transsphenoidal Pituitary Surgery in the United States

BACKGROUND

Geographic variations in health care costs have been reported for many surgical specialties.

OBJECTIVE

In this study, we sought to describe national and regional costs associated with transsphenoidal pituitary surgery (TPS).

METHODS

Data from the Truven-MarketScan 2010-2014 were analyzed. We examined overall total, hospital/facility, physician, and out-of-pocket payments in patients undergoing TPS including technique-specific costs. Mean payments were obtained after risk adjustment for patient-level and system-level confounders and estimated differences across regions.

RESULTS

The estimated overall annual burden was $43 million/year in our cohort. The average overall total payment associated with TPS was $35,602.30, hospital/facility payment was $26,980.45, physician payment was $4685.95, and out-of-pocket payment was $2330.78. Overall total and hospital/facility costs were highest in the West and lowest in the South (both P < 0.001), whereas physician reimbursements were highest in the North-east and lowest in the South (P < 0.001). There were no differences in out-of-pocket expenses across regions. On a national level, there were significantly higher overall total and hospital/facility payments associated with endoscopic compared with microscopic procedures (both P < 0.001); there were no significant differences in physician payments or out-of-pocket expenses between techniques. There were also significant within-region cost differences in overall total, hospital/facility, and physician payments in both techniques as well as in out-of-pocket expenses associated with microsurgery. There were no significant regional differences in out-of-pocket expenses associated with endoscopic surgery.

CONCLUSIONS

Our results show significant geographic cost disparities associated with TPS. Understanding factors behind disparate costs is important for developing cost containment strategies.

Was federal parity associated with changes in Out-of-network mental health care use and spending?

Background

The goal of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act is to eliminate differences in insurance coverage between behavioral health and general medical care. The law requires out-of-network mental health benefits be equivalent to out-of-network medical/surgical benefits. Insurers were concerned this provision would lead to unsustainable increases in out-of-network related expenditures. We examined whether federal parity implementation was associated with significant increases in out-of-network mental health care use and spending.

Methods

We conducted an interrupted time series analysis using health insurance claims from self-insured employers (2007–2012). We examined changes in the probability of using out-of-network mental health services and, conditional on out-of-network mental health service use, changes in the number of outpatient out-of-network mental health visits and total out-of-network mental health spending associated with the implementation of federal parity in 2010.

Results

From 2007 to 2012, the proportion of individuals receiving any out-of-network mental health services each month declined dramatically from 18 to 12%, with a one-time drop of 3 percentage points at parity implementation (p < .01). Among out-of-network mental health service users, there was an increase in the number of visits per month (.12 visits; p < .01) and total spending per month ($49; p < .01) at parity implementation. Although there was a one-time increase in spending at parity implementation, this increase was accompanied by an attenuation of a trend toward increased spending growth, such that spending was back to original predictions by the end of our study period.

Conclusions

Despite concerns expressed by the health insurance industry when federal parity was enacted, out-of-network mental health spending did not substantially increase after parity implementation. In addition, use of out-of-network mental health services appears to have contracted rather than expanded, suggesting insurers may have implemented other policies to curb out-of-network use, such as increasing access to in-network providers.

Electronic supplementary material

The online version of this article (doi:10.1186/s12913-017-2261-9) contains supplementary material, which is available to authorized users.

Geographic Access to Specialty Mental Health Care Across High- and Low-Income US Communities

Importance

With the future of the Affordable Care Act and Medicaid program unclear, it is critical to examine the geographic availability of specialty mental health treatment resources that serve low-income populations across local communities.

Objectives

To examine the geographic availability of community-based specialty mental health treatment resources and how these resources are distributed by community socioeconomic status.

Design, Setting, and Participants

Measures of the availability of specialty mental health treatment resources were derived using national data for 31 836 zip code tabulation areas from 2013 to 2015. Analyses examined the association between community socioeconomic status (assessed by median household income quartiles) and resource availability using logistic regressions. Models controlled for zip code tabulation area-level demographic characteristics and state indicators.

Main Outcomes and Measures

Dichotomous indicators for whether a zip code tabulation area had any (1) outpatient mental health treatment facility (more than nine-tenths of which offer payment arrangements for low-income populations), (2) office-based practice of mental health specialist physician(s), (3) office-based practice of nonphysician mental health professionals (eg, therapists), and (4) mental health facility or office-based practice (ie, any community-based resource).

Results

Of the 31 836 zip code tabulation areas in the study, more than four-tenths (3382 of 7959 [42.5%]) of communities in the highest income quartile (mean income, $81 207) had any community-based mental health treatment resource vs 23.1% of communities (1841 of 7959) in the lowest income quartile (mean income, $30 534) (adjusted odds ratio, 1.74; 95% CI, 1.50-2.03). When examining the distribution of mental health professionals, 25.3% of the communities (2014 of 7959) in the highest income quartile had a mental health specialist physician practice vs 8.0% (637 of 7959) of those in the lowest income quartile (adjusted odds ratio, 3.04; 95% CI, 2.53-3.66). Similarly, 35.1% of the communities (2792 of 7959) in the highest income quartile had a nonphysician mental health professional practice vs 12.9% (1029 of 7959) of those in the lowest income quartile (adjusted odds ratio, 2.77; 95%, 2.35-3.26). In contrast, outpatient mental health treatment facilities were less likely to be located in the communities in the highest vs lowest income quartiles (12.9% [1025 of 7959] vs 16.5% [1317 of 7959]; adjusted odds ratio, 0.43; 95% CI, 0.37-0.51). More than seven-tenths of the lowest income communities with any resource (71.5% [1317 of 1841]) had an outpatient mental health treatment facility.

Conclusions and Relevance

Mental health treatment facilities are more likely to be located in poorer communities, whereas office-based practices of mental health professionals are more likely to be located in higher-income communities. These findings indicate that mental health treatment facilities constitute the backbone of the specialty mental health treatment infrastructure in low-income communities. Policies are needed to support and expand available resources for this critical infrastructure.

The risk of unintentional out-of-network encounters with hospital-based physicians at in-network hospitals

OBJECTIVE

When hospital-based specialists including emergency physicians, anesthesiologists, pathologists and radiologists are not included in the same insurance networks as their parent hospitals, it creates confusion and leads to unexpected costs for patients. This study explored the frequency with which hospital-based physicians at academic medical centers are not included in the network directories for the same insurance networks as their parent teaching hospitals.

METHODS

We studied teaching hospitals with residency programs in all four hospital-based specialties. Using insurance plan provider directories, we determined whether each teaching hospital was in-network for randomly selected locally available insurance plans offered through the federal and state marketplace exchanges. For each established hospital-network relationship, we then determined whether hospital-based specialists were included in the provider network directory by searching for the name of each specialty's residency program director and the name of the physician practice group.

RESULTS

We identified 79 teaching hospitals participating in 144 locally available insurance plan networks. Hospital-based specialist inclusion in these hospital-network relationships was: emergency physicians: 50.0% (CI: 40%-59%); anesthesiologists: 50.0% (CI: 42%-58%); pathologists: 45.4% (CI: 37%-54%); and radiologists: 55.1% (46%-64%). Inclusion of all four hospital-based specialties occurred in only 45.0% (CI: 36%-54%) of the hospital-network relationships.

CONCLUSION

For insurance plans offered through the federal and state marketplace exchanges, hospital-based specialists frequently are not included in the directories for the insurance networks in which their parent teaching hospitals participate. Further research is needed to explore this issue at non-academic hospitals and for off-exchange insurance products, and to determine effective policy solutions.

Federal parity law associated with increased probability of using out-of-network substance use disorder treatment services

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 requires commercial insurers providing group coverage for substance use disorder services to offer benefits for those services at a level equal to those for medical or surgical benefits. Unlike previous parity policies instituted for federal employees and in individual states, the law extends parity to out-of-network services. We conducted an interrupted time-series analysis using insurance claims from large self-insured employers to evaluate whether federal parity was associated with changes in out-of-network treatment for 525,620 users of substance use disorder services. Federal parity was associated with an increased probability of using out-of-network services, an increased average number of out-of-network outpatient visits, and increased average total spending on out-of-network services among users of those services. Our findings were broadly consistent with the contention of federal parity proponents that extending parity to out-of-network services would broaden access to substance use disorder care obtained outside of plan networks.

Out-of-Network Emergency Department Use among Managed Medicaid Beneficiaries

OBJECTIVE

Out-of-network emergency department (ED) use, or use that occurs outside the contracted network, may lead to increased care fragmentation and cost. We examined factors associated with out-of-network ED use among Medicaid beneficiaries.

DATA SOURCES AND STUDY SETTING

Enrollment, claims, and encounter data for adult Medi-Cal health plan members with 1+ ED visits and complete Medicaid eligibility during the study period from 2013 to 2014.

STUDY DESIGN

We analyzed the data to identify factors associated with out-of-network ED use classified by mode of arrival (ambulance vs. nonambulance).

DATA EXTRACTION METHODS

We extracted encounter, ambulance, and ED census data and linked them together based on ED visit date.

PRINCIPAL FINDINGS

Of 11,143 ED visits, 6,808 (61.1 percent) were out-of-network. The number of hours the study ED was on ambulance diversion increased the odds of out-of-network visits for the 3,365 (30.2 percent) ED visits arriving by ambulance. For all visit types, assignment to a primary care clinic at the in-network hospital and having had any primary care visit during the study period decreased the odds of out-of-network ED care. Individuals were more likely to go out-of-network for ED care if they lived in neighborhoods containing out-of-network EDs.

CONCLUSIONS

There are a number of factors related to out-of-network ED use, including the proximity and density of out-of-network EDs, race and ethnicity, a prior history of out-of-network ED use, and individuals' connection to primary care. EDs that serve Medicaid beneficiaries may need to explore alternative sites and modalities of care as alternatives to the ED, and consider their ability to absorb large numbers of out-of-network visits given already limited capacity.

The financial burden of out-of-pocket expenses in the United States and Canada: How different is the United States?

BACKGROUND

This article compares the burden that medical cost-sharing requirements place on households in the United States and Canada. It estimates the probability that individuals with similar demographic features in the two countries have large medical expenses relative to income.

METHOD

The study uses 2010 nationally representative household survey data harmonized for cross-national comparisons to identify individuals with high medical expenses relative to income. Using logistic regression, it estimates the probability of high expenses occurring among 10 different demographic groups in the two countries.

RESULTS

The results show the risk of large medical expenses in the United States is 1.5-4 times higher than it is in Canada, depending on the demographic group and spending threshold used. The United States compares least favorably when evaluating poorer citizens and when using a higher spending threshold.

CONCLUSION

Recent health care reforms can be expected to reduce Americans' catastrophic health expenses, but it will take very large reductions in out-of-pocket expenditures-larger than can be expected-if poorer and middle-class families are to have the financial protection from high health care costs that their counterparts in Canada have.

Patients' willingness to contribute to cost of novel implants in total joint arthroplasty

As health care organizations adapt to more accountable financial models, it is increasingly important to assess how patients value new technologies, and their willingness to contribute to their cost. A questionnaire described features of a 'standard' implant including its longevity and risk of complications. We asked if participants would be willing to contribute to the cost of 3 novel implants with differing longevity and risk of complications. Our cohort included 195 patients, 45% were willing to add a co-pay to increase the longevity. Willingness to pay decreased to 26% with increased risk of complications, and 29% were willing to pay for a decreased risk of complications. Patients with higher education level, private insurance and males were more willing to contribute for a novel prosthesis. This study demonstrated that 26%-45% of patients are willing to share costs of a novel prosthesis. Willingness to pay was associated with the proposed implant benefits and with patient characteristics.

Patient experiences with involuntary out-of-network charges

BACKGROUND

Approximately 40 percent of individuals using out-of-network physicians experience involuntary out-of-network care, leading to unexpected and sometimes burdensome financial charges. Despite its prevalence, research on patient experiences with involuntary out-of-network care is limited. Greater understanding of patient experiences may inform policy solutions to address this issue.

OBJECTIVE

To characterize the experiences of patients who encountered involuntary out-of-network physician charges.

METHODS

Qualitative study using 26 in-depth telephone interviews with a semi-structured interview guide. Participants were a purposeful sample of privately insured adults from across the United States who experienced involuntary out-of-network care. They were diverse with regard to income level, education, and health status. Recurrent themes were generated using the constant comparison method of data analysis by a multidisciplinary team.

RESULTS

Four themes characterize the perspective of individuals who experienced involuntary out-of-network physician charges: (1) responsibilities and mechanisms for determining network participation are not transparent; (2) physician procedures for billing and disclosure of physician out-of-network status are inconsistent; (3) serious illness requiring emergency care or hospitalization precludes ability to choose a physician or confirm network participation; and (4) resources for mediation of involuntary charges once they occur are not available.

CONCLUSIONS

Our data reveal that patient education may not be sufficient to reduce the prevalence and financial burden of involuntary out-of-network care. Participants described experiencing involuntary out-of-network health care charges due to system-level failures. As policy makers seek solutions, our findings suggest several potential areas of further consideration such as standardization of processes to disclose that a physician is out-of-network, holding patients harmless not only for out-of-network emergency room care but also for non-elective hospitalization, and designation of a mediator for involuntary charges.