In-Network Provider Use Rises Despite Bureaucratic Barriers

The percentage of patients receiving in-network care increased nationally by 7% across all medical specialties from 2019 to 2023, according to a new report.

Overall, the national percentage of in-network care rose from 84.1% in the first quarter of 2019 to 90% in the third quarter of 2023. Although the percentages increased across all regions, the increases varied by region, from 4.8% in the Northeast to 8.3% in the South and Midwest. 

The analysis was conducted by FAIR Health, a healthcare data analytics and consumer education organization, and included data following the implementation of the No Surprises Act of 2022. 

The No Surprises Act was designed to protect people covered under group and individual health plans from receiving surprise medical bills for most emergency services, nonemergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance service providers, according to the Centers for Medicare & Medicaid Services. The act also established an independent dispute resolution process for payment disputes between plans and providers.

In the report, FAIR Health researchers reviewed in-network and out-of-network use and pricing from private healthcare claims from 2019 to 2023. The No Surprises Act may have affected the results, which showed an increase of 2.3% of in-network use nationally from the fourth quarter of 2021 to the first quarter of 2022, when the No Surprises Act was first implemented. 

The researchers also conducted a subanalysis with a focus on the use of anesthesia, emergency medicine, pathology, and radiology (defined in the report as “specialties of interest”), which have been historically associated with surprise bills. The authors found a 4.7% increase overall from the first quarter of 2019 to the third quarter of 2023 for in-network use in these areas. The greatest increase occurred in emergency medicine and the smallest increase occurred in pathology (13.2% and 0.6%, respectively). Regionally, in-network care for anesthesiology, pathology, and radiology decreased in the South in 2023, the authors noted.

Overall, allowed amounts as a percentage of billed amounts decreased over the study period for in-network and out-of-network services, with decreases of 14.3% and 9.6%, respectively, from the first quarter of 2019 to the third quarter of 2023.

The findings of the analysis were limited by several factors, including the observational design, inclusion of only data from privately insured patients and third-party administrators who voluntarily participated in data contribution, and lack of peer review, the authors wrote. 

Why the No Surprises Act Matters

“FAIR Health recognized that our unparalleled private healthcare claims collection could shed critical light on several topics drawing attention in the healthcare space, including federal and state surprise billing initiatives, the breadth and adequacy of in-network offerings and provider access, and the trajectory of costs for both in-network and out-of-network services,” said Robin Gelburd, JD, president of FAIR Health, in an interview. 

“In particular, there has been interest in public corners as to whether the No Surprises Act (NSA) is having any impact on the relative percentages of in-network and out-of-network utilization, as well as any impact on both billed and allowed amounts for those services particularly implicated by the NSA,” she said. The current white paper supports FAIR Health’s mission to offer transparency to health insurance information, she said. 

Gelburd said she was not surprised by the findings in the report, given the combination of state and federal surprise billing legislation during the study period. 

“For clinicians, the paper is a window into the ways in which in-network and out-of-network participation is evolving, which might serve as a helpful backdrop to their network participation decisions,” Gelburd told Medscape. 

As for additional research, “We selected a window in time that captured the period before and after the implementation of the federal NSA,” said Gelburd. “Additional research into how allowed amounts for both in-network and out-of-network services trend over time, as well as how network participation continues to evolve in the wake of state and federal surprise billing initiatives, will be of great value to all stakeholders in the healthcare system,” she said. 

No Surprises’ Strengths and Weaknesses

“The findings contained in the FAIR Health report are important to shape our understanding of how effective the No Surprises Act has been in reducing balance billing, so patients do not face egregious and inappropriate bills from out-of-network providers using in-network facilities for both unscheduled and scheduled medical care,” said Robert Glatter, MD, an emergency medicine physician at Lenox Hill Hospital, New York, NY, in an interview. 

“The bulk of the problem arises in unscheduled care, especially in the emergency department, when on-call specialists, who are often out-of-network, provide care for patients,” Glatter said. “In many such cases, patients will be ineligible for full coverage of services provided by the specialist delivering care, such as if an out-of-network on-call specialist provides services at an in-network facility.”

The independent dispute resolution (IDR) process has helped with some disputes, but ongoing legal challenges to the NSA from out-of-network providers and staffing companies have created a backlog of cases to the frustration of providers and insurers, Glatter said. 

However, “the new FAIR Health report notes that the percentage of in-network claims has increased, potentially reflecting a shift in providers and hospitals to in-network status over the past several years since the NSA was passed into law,” he said.

“The percentage of insurance claims that are in-network has also significantly increased in emergency medicine, reflecting a shift in how hospitals have adjusted since the NSA was enacted,” Glatter added. The new law has affected how providers, ambulatory surgery centers, and hospitals have adjusted to maximizing reimbursement while minimizing inappropriate and unwarranted charges to patients, he said.

“I was surprised that the FAIR Health report found an increased gap between the billed amount and the allowed amount, which reflects the final fee negotiated between provider and insurer,” said Glatter. The numbers indicate that “allowed amounts, reflecting the costs that are actually paid for out-of-network services, are now approaching amounts paid for in-network care,” he said.

Clinical Implications and Research Gaps

In practice, the takeaway from the report is that although some providers may choose to remain out of network to maximize reimbursement, the amount they ultimately collect may not necessarily increase over time, Glatter told Medscape. 

“Many providers contend, and rightfully so, that the IDR is laborious, expensive, inefficient and time-consuming,” and that insurers have failed to comply with payment decisions, he said.

“However an analysis by AHIP, an industry insurance group, and Blue Cross Blue Shield Association (BCBSA) estimates that nearly 10 million surprise bills were averted in the first 9 months of 2023,” he noted. 

More research is needed to address potential concerns that the NSA would increase patients’ costs by raising their insurance premiums, Glatter said. “This relates to a calculation known as the QPA, or qualified payment amount, set by insurers as the median contracted rate for a specific service in a given geographic area,” he explained. “The fact that the final ‘allowed amount’ was typically greater than previous median in-network prices may reflect that the NSA could potentially have the opposite effect, by increasing premiums, which ultimately will be passed onto patients in the long run,” he said.

The study was supported by FAIR Health with no outside funding. The authors had no financial conflicts to disclose. Glatter had no financial conflicts to disclose. 

Heidi Splete is a freelance medical journalist with 20 years of experience.

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