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Objectives Anesthesiology services are a focal point of policy making to address surprise medical billing. However, allowed amounts and charges for anesthesiology services have been understudied due to the specialty's unique conversion factor (CF) unit of payment and complex provider structures involving anesthesiologists and certified registered nurse anesthetists (CRNAs). This study compares payments for common outpatient anesthesiology services by commercial health plans, Medicare Advantage (MA), and traditional Medicare. Study design Analysis of 2016-2017 claims from Health Care Cost Institute. Methods We derived allowed amount and charge CFs for commercial and MA claims using the base units assigned to each procedure code, time units, and modifiers. We computed the ratio of the allowed amount and charge CFs relative to the traditional Medicare CF. We described these payment measures by provider structure and network status. Results Mean in-network commercial allowed amount CFs for anesthesiology services ($70) are 314% of the traditional Medicare rate ($22), whereas mean commercial charge CFs ($148) are 659% of the Medicare rate. Commercial payments vary widely and are higher to anesthesiologists than to CRNAs and higher out of network than in network. MA plan payments align with traditional Medicare with payment parity between anesthesiologists and CRNAs, both in network and out of network. Conclusions Common payment measures for anesthesia services-commercial allowed amounts, charges, or traditional Medicare-are highly divergent. MA plans' relatively low payments likely reflect the cost-containing influence of competition with traditional Medicare and MA's prohibition on balance billing. Out-of-network benchmarks for anesthesia services, such as the "qualifying payment amount" used in the No Surprises Act as a guidepost for arbitrators, may benefit from considering commercial payment differences across independent anesthesiologist, independent CRNA, or anesthesiologist-CRNA dyad provider structures.

In 2018 New Jersey implemented a final-offer arbitration system to resolve payment disputes between insurers and out-of-network providers over surprise medical bills. Similar proposals are being considered by Congress and other states. In this article we examine how arbitration decisions compare with other relevant provider payment amounts by linking administrative data from New Jersey arbitration cases to Medicare and commercial insurance claims data. We find that decisions track closely with one of the metrics that arbitrators are shown-the eightieth percentile of provider charges-with the median decision being 5.7 times prevailing in-network rates for the same services. It is not a foregone conclusion that arbitrators will select winning offers based on proximity to this target, although our findings suggest that it is a strong anchor. The amount that providers can expect to receive through the arbitration process also affects their bargaining leverage with insurers, which could affect in-network negotiated rates more broadly. Therefore, basing arbitration decisions or a payment standard on unilaterally set provider-billed charges appears likely to increase health care costs relative to other surprise billing solutions and perversely incentivizes providers to inflate their charges over time.

Objectives To quantify the proportion of health plan spending on services for which surprise billing is common-provided by radiologists, anesthesiologists, pathologists, emergency physicians, emergency ground ambulances, and emergency outpatient facilities-and estimate the potential impact of proposed policies to address surprise billing on health insurance premiums. Study design Analysis of 2017 commercial claims data from the Health Care Cost Institute, comprising 568.5 million claims from 44.8 million covered lives in 3 large US insurers: UnitedHealthcare, Aetna, and Humana. Methods We calculate the share of total health plan claims spending attributable to ancillary and emergency services. Next, we estimate the premium impact of proposed federal policies to address surprise billing, which, by removing provider leverage stemming from the ability to surprise-bill, could reduce in- and out-of-network payments for these services, in turn affecting premiums. Specifically, we model the premium impact of reducing payment for these services (1) by 15% and (2) to 150% of traditional Medicare payment rates. Results More than 10% of health plan spending is attributable to ancillary and emergency services that commonly surprise-bill. Reducing payment for these services by 15% would reduce premiums by 1.6% ($67 per member per year), and reducing average payment to 150% of traditional Medicare rates-the high end of payments to other specialists-would reduce premiums by 5.1% ($212 per member per year). These savings would reduce aggregate premiums for the nation's commercially insured population by approximately $12 billion and $38 billion, respectively. Conclusions Addressing surprise billing could substantially affect commercial insurance premiums.

Patients treated at in-network facilities can involuntarily receive services from out-of-network providers, which may result in “surprise bills.” While several studies report the surprise billing p...

Who Pays in Medicare Part D? As U.S. policymakers debate proposals for reforming the prescription-drug marketplace, they should recognize the need to update the Medicare Part D benefit design to gi...

This cross-sectional study uses 2017 and 2018 Medicare Part D clams to compare the amount Medicare pays for common generic prescriptions in Part D with prices available to patients without insurance at Costco.

This cross-sectional study examines the prevalence and spending of patients with end-stage kidney disease in the individual market.

Policy Points Out-of-network air ambulance bills are a type of surprise medical bill and are driven by many of the same market failures behind other surprise medical bills, including patients' inability to choose in-network providers in an emergency or to avoid potential balance billing by out-of-network providers. The financial risk to consumers is high because more than three-quarters of air ambulances are out-of-network and their prices are high and rising. Consumers facing out-of-network air ambulance bills have few legal protections owing to the Airline Deregulation Act's federal preemption of state laws. Any federal policies for surprise medical bills should also address surprise air ambulance bills and should incorporate substantive consumer protections-not just billing transparency-and correct the market distortions for air ambulances. Context Out-of-network air ambulance bills are a growing problem for consumers. Because most air ambulance transports are out-of-network and prices are rising, patients are at risk of receiving large unexpected bills. This article estimates the prevalence and magnitude of privately insured persons' out-of-network air ambulance bills, describes the legal barriers to curtailing surprise air ambulance bills, and proposes policies to protect consumers from out-of-network air ambulance bills. Methods We used the Health Care Cost Institute's 2014-2017 data from three large national insurers to evaluate the share of air ambulance claims that are out-of-network and the prevalence and magnitude of potential surprise balance bills, focusing on rotary-wing transports. We estimated the magnitude of potential balance bills for out-of-network air ambulance services by calculating the difference between the provider's billed charges and the insurer's out-of-network allowed amount, including the patient's cost-sharing. For in-network air ambulance transports, we calculated the average charges and allowed amounts, both in absolute magnitude and as a multiple of the rate that Medicare pays for the same service. Findings We found that less than one-quarter of air ambulance transports of commercially insured patients were in-network. Two-in-five transports resulted in a potential balance bill, averaging $19,851. In the latter years of our data, in-network rates for transports by independent (non-hospital-based) carriers averaged $20,822, or 369% of the Medicare rate for the same service. Conclusions Because the states' efforts to curtail air ambulance balance billing have been preempted by the Airline Deregulation Act, a federal solution is needed. Owing to the failure of market forces to discipline either prices or supply, out-of-network air ambulance rates should be benchmarked to a multiple of Medicare rates or, alternatively, air ambulance services could be delivered and financed through an approach that combines competitive bidding and public utility regulation.

Objective To examine the effects of insurance and hospital market concentration on hospital patients' experience of care, as hospitals may compete on quality for favorable insurance contracts. Data sources/study setting Secondary data for 2008-2015 on patient experience from Hospital Compare's patient survey data, hospital characteristics from the American Hospital Association (AHA) Annual Survey, and insurance market characteristics from HealthLeaders-InterStudy. Study design Hospital/year-level regressions predict each hospital's patient experience measure as a function of insurance and hospital market concentration and hospital fixed effects. The model is identified by longitudinal variation in insurance and hospital concentration. Data collection/extraction methods Hospital/year-level data from Hospital Compare and the AHA merged by market/year to insurance and hospital concentration measures. Principal findings Changes in patient satisfaction are positively associated with increases in insurance concentration and negatively associated with increases in hospital concentration. Moving from a market with 20th percentile insurance concentration and 80th percentile hospital concentration to a market with 80th percentile insurance concentration and 20th percentile hospital concentration increases the share of patients that rated the hospital highly from 66.9 percent (95% CI: 66.5-67.2 percent) to 67.9 percent (95% CI: 67.5-68.3 percent) and the share of patients that definitely recommend the hospital from 69.7 percent (95% CI: 69.4-70.0 percent) to 70.8 percent (95% CI: 70.5-71.2 percent). The relationship for insurance concentration is stronger in more concentrated hospital markets, while the relationship for hospital concentration is stronger in less concentrated hospital markets. Conclusions These findings add to the evidence on the harms of hospital consolidation but suggest that insurer consolidation may improve patient experience.

Reducing Unfair Out-of-Network Billing High charges for out-of-network care are demonstrably unfair when health plans have inadequate networks and when patients are treated by providers they don’t ...

Specialty pharmaceuticals include most injectable and biologic agents used to treat complex conditions such as rheumatoid arthritis, multiple sclerosis, and cancer. We analyzed trends in specialty drug spending among Medicare beneficiaries ages sixty-five and older using 2007–11 pharmacy claims data from a 20 percent sample of Medicare beneficiaries. Annual specialty drug spending per beneficiary who used specialty drugs increased considerably during the study period, from $2,641 to $8,976. However, specialty drugs accounted for only 6.7 percent of total drug spending per beneficiary in 2007 and 9.1 percent in 2011. Moreover, in 2011 cost-sharing reductions under the Affordable Care Act significantly reduced specialty drug users’ out-of-pocket burden, which decreased 26 percent from 2010. Oral cancer agents accounted for a significant proportion of the increase in specialty drug spending among the study population. This suggests that the migration of specialty drug coverage from Medicare’s Part B medical benefit to the Part D pharmacy benefit because of new treatment options may play an important role in specialty pharmacy trends. This shift is likely to continue as pharmaceutical innovations enable more specialty therapeutics to be self-administered and to be covered under the pharmacy instead of the medical benefit.

Objectives To measure value in the delivery of inpatient care and to quantify its variation across U.S. regions. Data sources / Study setting A random (20%) sample of 33,713 elderly fee-for-service Medicare beneficiaries treated in 2,232 hospitals for a heart attack in 2013. Study design We estimate a production function for inpatient care, defining output as stays with favorable patient outcomes in terms of survival and readmission. The regression model includes hospital inputs measured by treatment costs, as well as patient characteristics. Region-level effects in the production function are used to estimate the productivity and value of the care delivered by hospitals within regions. Data collection / Extraction methods Medicare claims and enrollment files, linked to the Dartmouth Atlas of Health Care and Inpatient Prospective Payment System Impact Files. Principal findings Hospitals in the hospital referral region at the 90th percentile of the value distribution delivered 54% more high-quality stays than hospitals at the 10th percentile could have delivered, after adjusting for treatment costs and patient severity. Conclusions Variation in the delivery of high-value inpatient care points to opportunities for better quality and lower costs.

The Affordable Care Act (ACA) includes provisions to reduce Medicare beneficiaries’ out-of-pocket spending for prescription drugs by gradually closing the coverage gap between the initial coverage limit and the catastrophic coverage threshold (known as the “doughnut hole”) beginning in 2011. However, Medicare beneficiaries who take specialty pharmaceuticals might still face a large out-of-pocket burden because of uncapped cost sharing in the catastrophic coverage phase. Using 2008–12 pharmacy claims data from a 20 percent sample of Medicare beneficiaries, we analyzed trends in total spending and out-of-pocket spending among Medicare beneficiaries who take at least one high-cost specialty drug from the top eight specialty drug classes in terms of spending. Annual total drug spending per specialty drug user studied increased considerably during the study period, from $18,335 to $33,301, and the proportion of expenditures incurred while in the catastrophic coverage phase increased from 70 percent to 80 percent. We observed a 26 percent decrease in mean annual out-of-pocket expenditures incurred below the catastrophic coverage threshold, likely attributable to the ACA’s doughnut-hole cost-sharing reductions, but increases in mean annual out-of-pocket expenditures incurred while in the catastrophic coverage phase almost entirely offset these reductions. Policy makers should consider implementing limits on patients’ out-of-pocket burden.

The slowed growth in national health care spending over the past decade has led analysts to question the extent to which this recent slowdown can be explained by predictable factors such as the Great Recession or must be driven by some unpredictable structural change in the health care sector. To help address this question, we first estimate a regression model for state personal health care spending for 1991-2009, with an emphasis on the explanatory power of income, insurance, and provider market characteristics. We then use the results from this simple predictive model to produce state-level projections of health care spending for 2010-2013 to subsequently compare those average projected state values with actual national spending for 2010-2013, finding that at least 70% of the recent slowdown in health care spending can likely be explained by long-standing patterns. We also use the results from this predictive model to both examine the Great Recession’s likely reduction in health care spending and project the Affordable Care Act’s insurance expansion’s likely increase in health care spending.

Importance Nearly one-third of Medicare beneficiaries are enrolled in a Medicare Advantage (MA) plan, yet little is known about the prices that MA plans pay for physician services. Medicare Advantage insurers typically also sell commercial plans, and the extent to which MA physician reimbursement reflects traditional Medicare (TM) rates vs negotiated commercial prices is unclear. Objective To compare prices paid for physician and other health care services in MA, traditional Medicare, and commercial plans. Design, Setting, and Participants Retrospective analysis of claims data evaluating MA prices paid to physicians and for laboratory services and durable medical equipment between 2007 and 2012 in 348 US core-based statistical areas. The study population included all MA and commercial enrollees with a large national health insurer operating in both markets, as well as a 20% sample of TM beneficiaries. Exposures Enrollment in an MA plan. Main Outcomes and Measures Mean reimbursement paid to physicians, laboratories, and durable medical equipment suppliers for MA and commercial enrollees relative to TM rates for 11 Healthcare Common Procedure Coding Systems (HCPCS) codes spanning 7 sites of care. Results The sample consisted of 144 million claims. Physician reimbursement in MA was more strongly tied to TM rates than commercial prices, although MA plans tended to pay physicians less than TM. For a mid-level office visit with an established patient ( Current Procedural Terminology [ CPT ] code 99213), the mean MA price was 96.9% (95% CI, 96.7%-97.2%) of TM. Across the common physician services we evaluated, mean MA reimbursement ranged from 91.3% of TM for cataract removal in an ambulatory surgery center ( CPT 66984; 95% CI, 90.7%-91.9%) to 102.3% of TM for complex evaluation and management of a patient in the emergency department ( CPT 99285; 95% CI, 102.1%-102.6%). However, for laboratory services and durable medical equipment, where commercial prices are lower than TM rates, MA plans take advantage of these lower commercial prices, ranging from 67.4% for a walker (HCPCS code E0143; 95% CI, 66.3%-68.5%) to 75.8% for a complete blood cell count ( CPT 85025; 95% CI, 75.0%-76.6%). Conclusions and Relevance Traditional Medicare’s administratively set rates act as a strong anchor for physician reimbursement in the MA market, although MA plans succeed in negotiating lower prices for other health care services for which TM overpays. Reforms that transition the Medicare program toward some premium support models could substantially affect how physicians and other clinicians are paid.