The Issue

Surprise billing has been a focus of state and federal policymakers aiming to protect patients from unanticipated bills for out-of-network medical services, including anesthesia. Anesthesiology accounts for a high proportion of potential surprise bills, since patients typically do not choose their anesthesiologist.

With Commonwealth Fund support, researchers with Columbia University and Weill Cornell Medical College compared prices paid for anesthesiology services in three states — California, Florida, and New York — that had passed surprise-billing legislation with prices paid in 45 states that had not passed such laws. Writing in JAMA Internal Medicine, the research team analyzed more than 2.7 million claims from hospital outpatient departments and ambulatory surgery centers for patients in preferred provider organizations and point-of-service plans from 2014 to 2017. The claims involved in-network anesthesiologists as well as out-of-network anesthesiologists at in-network facilities.

What the Study Found

  • After California, Florida, and New York passed comprehensive surprise-billing legislation, prices paid to anesthesiologists working in hospital outpatient departments and ambulatory surgery centers decreased. The unit price paid to out-of-network anesthesiologists at in-network facilities dropped by $12.71 in California and by $35.67 in Florida. In New York, the overall price reduction for out-of-network anesthesia services was not statistically significant, but by the last quarter of the study period, the price had dropped by $41.28.
  • In-network unit prices for anesthesia also declined in all three states, dropping by $3.18 in Florida to as much as $10.68 in California. In a real-world context, this would mean that prices for anesthesia provided by an in-network anesthesiologist for a routine colonoscopy declined from $23.29 (3.16%) in Florida and by as much as $74.36 (10.75%) in California.
  • The results suggest that surprise-billing laws may have an impact on in-network contract negotiations between payers and providers. Anticipating the passage of surprise-billing laws also could spur preemptive contract talks.
  • One limitation of the study is that it focuses on claims for three large U.S. health plans (Aetna, UnitedHealthcare, and Humana), rather than all commercial claims, so the findings may not be applicable to other insurers.

If state provider payment rules are effective in lowering the prices paid for out-of-network care, they may also influence in-network prices by altering providers’ negotiating leverage and incentives to remain out-of-network.

The Big Picture

This research offers a glimpse into how prices could change in the 18 states that have already passed legislation to address surprise medical bills. More broadly, it hints at the potential impact of federal legislation like the No Surprises Act, which goes into effect January 2022. That law is intended not only to protect patients from financial liability for surprise medical bills but also to establish a method for determining payments made by a patient’s insurer to an out-of-network provider.

The Bottom Line

Prices paid to in- and out-of-network anesthesiologists in hospital outpatient departments and ambulatory centers dropped in three states that passed laws to protect patients against surprise bills. These findings illustrate how prices could change following the passage of state or federal laws against surprise billing, which remains top of mind for policymakers.