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Patients ending up with large bills for out-of-network doctors they did not select

Privately insured Maryland patients typically pay several times more for out-of-network medical services and procedures than what Medicare pays for the same services, according to new research from John Hopkins.

They face unexpectedly large bills after doctors who were not part of their insurance companies' network of approved providers are assigned to treat them at hospitals.


Some of these doctors charged as much as six times what Medicare charges for similar services, according to research published today in the Journal of the American Medical Association. Medicare pricing is often used as a gauge for what other insurance companies charge for services.

The national analysis by the Johns Hopkins Bloomberg School of Public Health and the Johns Hopkins Carey Business School found that similarly high rates were charged to patients across the country. In Maryland, the median rate charged by out-of-network doctors was 220 percent higher than what Medicare pays.


The medical services were provided, and the rates set, by doctors that patients often had no say in choosing. For instance, patients don't get to choose the anesthesiologists who sedates them for surgery. In many cases, the patient is in an emergency situation and an out-of-network provider is the only person available.

Some patients have a hard time paying the unexpected bills, the researchers said.

"There is no regulation that tells them how much they should charge and there are really no market forces that constrain how much they can charge either," said Gerard F. Anderson, the study's senior author and a professor in the Bloomberg School's Department of Health Policy and Management. "Most of the time people don't know how much they are getting charged until after they get the bill."

Doctors groups criticized the research, calling Medicare an unfair comparison, because they believe the federal insurance program for older Americans underpays for medical services.

Medicare payments are determined in accordance with the federal government's budget, said Dr. Jeffrey Plagenhoef, president of the American Society of Anesthesiologists. He argued that Medicare does not pay market value nor does it pay "equitable and equally among all medical specialties."

The Hopkins study found the average anesthesiologist, emergency physician, pathologist and radiologist charge more than four times what Medicare pays for similar services. The average physician charged about 2.5 times what Medicare pays for the same service.

The researchers analyzed 2014 Medicare Provider Utilization and Payment Data. They compared what doctors charge to Medicare rates in many specialties. Data from more than 400,000 doctors was examined.

"I think it's a very misleading study and set of conclusions," Plagenhoef said.


The Johns Hopkins researchers said that excess charges were higher for specialties where patients were less likely to be able to choose their doctor, such as anesthesiologists. The researchers wrote in their report that they knew of no studies that showed Medicare systematically underpays these specialties.

Plagenhoef disputed that assertion, pointing to a 2007 Government Accountability Office report that said differently.

The American College of Radiology also said that Medicare is not a good benchmark and that doctors are charging reasonable rates, even when out-of-network. The two groups said that insurance plans are too restrictive and don't include enough in-network doctors for policyholders to choose from.

"I think it is to some degree an insurance issue," said Dr. Ezequiel Silva, chair of the economics commission of the college of radiology. "If the insurance companies are not going to assure the robustness of their network, they have a shortcoming."

The insurance industry says they include as many doctors in their insurance plans as they can.

"It is a matter of negotiating the rates and what doctors are willing to agree to," said Kristine Grow, senior vice president of communications at America's Health Insurance Plans.


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Doctors and insurance groups believe the system could be more transparent for patients, although they don't agree how that should be accomplished.

The Hopkins researchers said federal legislation to require doctors to share if they are out-of-network before they provide care could help the problem. They also suggest posting prices. This would not help in emergency situations, they acknowledge.

Others states have taken some steps to help with the high pricing. New York recently passed laws restricting the amount that out-of-network physicians can charge. Eleven other states also have limited what out-of-network physicians can charge. Most of the rules apply only to emergency care.

"Essentially, now that we have the numbers and data, what we need to do is to have some policy to protect people from these very high charges," Anderson said.

This story has been updated to accurately characterize Medicare.