Research translates to policy change on "Surprise Billing"

March 18, 2021

Research on “surprise billing” by a team at Michigan Medicine that included two surgical residents contributed to the chorus of voices that resulted in such change; federal legislation passed last December as part of a COVID relief bill will prevent patients from getting “balance bills” when they seek emergency care, require air ambulance transportation or unwittingly get care from out-of-network providers or services during non-emergency care, reported the University of Michigan’s Institute for Healthcare Policy and Innovation (IHPI).

IHPI and the Center for Healthcare Outcomes and Policy (CHOP) are focused on defining problems in health services and healthcare delivery, proposing solutions and informing public policy. Karan Chhabra, M.D., M.Sc., a third-year resident at Brigham and Women’s Hospital and former National Clinician Scholar at the U-M Institute for Healthcare Policy and Innovation (IHPI), who came to Michigan for his research fellowship after his second year of residency, drove the project and recalled that the work into surprise billing started by trying to illuminate a problem mostly informed by anecdotes and sporadic news coverage.

“We were reading in the news that patients were getting these massive bills for thousands of dollars that they had no ability to prevent. They did all their homework. They made sure that their procedure and their doctor was covered by their insurance. They knew their deductible. They knew their coverage and then they got a surprise bill for something from someone they had never even met,” Chhabra says.

There was some data available on how often the practice was happening in emergency departments. The limiting factor in understanding the practice better in surgical settings in particular, and therefore proposing solutions, was a lack of data. 

Chhabra and Kyle Sheetz, M.D., M.P.H., a chief resident in general surgery at Michigan Medicine, applied for and secured an IHPI Policy Sprint to dig into the issue deeper. Policy Sprints are, as the name implies, supported projects meant to produce rapid analyses around health policy questions, and inform decision-making around those policies. Teams working under approved Policy Sprints get assistance from the IHPI team for project coordination, data analysis, messaging and dissemination. Up to $10,000 in funds are also available to support the work. 

The team found plenty to shine a light on in the claims data they analyzed from a large insurance company. The data revealed that of the 347,000 patients under 65 years old who had one of seven specific operations between 2012 and 2017, 20.5% of the operations led to an out-of-network bill—even if the surgeons and healthcare systems were in the patients’ network. The findings were published in JAMA.

Chhabra was surprised to find that out-of-network surprise bills in elective surgery are just as common as they are for patients going to the emergency department. In non-emergency situations, patients can choose their surgeon and their hospital, after all. 

“Learning about the role of assistant surgeons was pretty remarkable. In 37% of those cases, an out of network bill came from a surgical assistant, the same proportion that came from an anesthesiologist,” Chhabra says.

Those bills from assistants were also significantly higher: $3600 per case on average vs. $1,200 per case from anesthesiologists. 

Chhabra, Sheetz and their colleagues explored the issue further, digging into claims data around air- and ground-ambulance billing, for which they found a similar trend: Most patients utilizing those services received sizable out-of-network bills. Those findings were published in Health Affairs

Armed with knowledge like this, surgeons could help patients by being deliberate about choosing assistants, according to Chhabra. While helpful, such measures aren’t a systems-level solution. 

As the papers gained traction, national media picked up on the work. Before COVID-19 dominated the news cycle and healthcare systems’ attention, The Atlantic did a deep-dive into the surprise bills that come with surgery, citing the teams’ work. The attention prompted an invitation for Chhabra to deliver a briefing on the research findings to congressional staff, reporters, and health policy organizations at the U.S. Capitol in February 2020. It would be one of the last trips he’d make before COVID-19 grounded many activities—and momentum in Congress around changing policy. 

Many months after the pandemic had settled in and it was clear it would be sticking around for a while, The New York Times spotlighted the massive surprise bills COVID-19 patients were being hit with for air ambulance transportation and cited the work from the Policy Sprint team. 

The COVID economic relief bill passed by Congress included legislation related to curbing surprise bills associated with emergency care, air ambulance usage and non-emergency care received at in-network hospitals. Patients will pay copayments and deductibles in line with their plans’ in-network terms. Out-of-network providers looking to recoup higher fees will have to pursue them through arbitration with insurers. 

“They were actually able to get something done to protect patients. We can talk about the limitations of the policy and things that could have been done better, but overall, I am just grateful that something happened. It was long overdue,” Chhabra says.

One notable limitation of the legislation is that surprise bills related to ground ambulances—which are used in far greater volume than air ambulances and therefore are associated with a larger overall number of such bills—were not addressed. 

While others had been working on the same issues, the team saw the Policy Sprint team’s fingerprints on the legislation. The work was cited in a report by the U.S. Department of Health & Human Services flagging the issue.

University of Michigan’s Institute for Healthcare Policy and Innovation has the brief.

More COVID-19 coverage HERE.