New Study by Zack Cooper, Fiona Scott Morton Exposes the Costs of Out-of-Network Billing

July 24, 2017

In a new ISPS working paper*,  “Surprise! Out-of-Network Billing for Emergency Care in the United States”,  Zack Cooper and co-authors Fiona Scott Morton and Nathan Shekita, explore out-of-network billing in emergency rooms in U.S. hospitals.  Using insurance claims data, Cooper and co-authors show that in 22% of emergency episodes, patients attended in-network hospitals, but were treated by out-of-network physicians.

Out-of-network billing allows physicians to significantly increase their payment rates relative to what they would be paid for treating in-network patients. Because patients cannot avoid out-of-network physicians during an emergency, physicians have an incentive to remain out-of-network and receive higher payment rates.

This exposes patients to significant financial risk. The study finds that out-of-network billing is concentrated in a small group of predominantly for-profit hospitals. 

Media coverage:

  • “The Company Behind Many Surprise Emergency Bills.” New York Times
  • “The Price of Medical Emergencies: Study Examines Out-of-Network Billing.”  Yale News
  • “Watch Out for These Surprise Charges at the ER.” NPR’s Marketplace 
  • “Yale Research Points to Dallas Company for Spike in Costly Hospital Bills.” Dallas News
  • “Surprise Bills Confound Vulnerable Patients at Emergency Rooms.”  WSHU

 

© 2017 by Zack Cooper, Fiona Scott Morton, and Nathan Shekita. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.