Overall, the researchers found, the average physician charged roughly 2.5 times what Medicare pays for the same service. While the Medicare program determines what Medicare pays for certain services, out-of-network patients -- along with the uninsured, and casualty and worker's compensation insurers -- often pay the full charge, which can be as much as two to six times what Medicare and most privately insured in-network insurers will pay.
There are also regional differences in excess charges. Doctors in Wisconsin, for example, have almost twice the markups of doctors in Michigan (3.8 vs. two).
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Among the 10,730 physicians whose markups were among the top 2.5 percent of all physicians, 55 percent of them were anesthesiologists, and 32 percent of them were in 10 regions: Manhattan (NY), Houston (TX), East Long Island (NY), Dallas (TX), Milwaukee (WI), Atlanta (GA), Camden (NJ), Los Angeles (CA), Newark (NJ) and Charlotte (NC).
"Protecting patients from surprise medical bills from out-of-network physicians is an important issue in the ongoing national debate about the affordability of health care," Bai says. "It is particularly frustrating for patients who deliberately select an in-network hospital and an in-network physician only to learn that one of their physicians was out of network long after the care was delivered."
Anderson and Bai say Congress should take steps to require physicians to disclose their network status to each patient before delivering the service and improve price transparency by posting out-of-network prices. Disclosure alone, however, won't solve the problem entirely as sometimes it is not an option for patients in an emergency situation or who are too frail to make decisions.
States are beginning to act. In 2015, New York State enacted a law restricting the amount that out-of-network physicians could charge a patient. Eleven other states have limited the amount that can be charged by out-of-network physicians, but most of the rules apply mainly to emergency care. Anderson says the New York law could serve as a model for reducing excessive surprise medical bills.
"Variation in the Ratio of Physician Charges to Medicare Payments by Specialty and Geographic Region" was written by Ge Bai and Gerard F. Anderson.
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