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Study Analyses Effect of Connecticut 2016 Surprise Billing Law on Emergency Physician Services Market

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A study by USC Brookings Schaeffer Initiative for Health Policy, presents preliminary evidence about the effects of Connecticut’s 2016 surprise billing law on the emergency physician services market.

Connecticut’s law took effect on July 1, 2016 and regulates only the fully-insured commercial market within the state. It requires that a patient’s out-of-pocket costs be no greater than their in-network cost-sharing amounts if they are unknowingly treated by an out-of-network provider at an in-network facility.

Researchers analyzed Health Care Cost Institute (HCCI) data that includes commercial insurance claims from Aetna, Humana, and United Healthcare. They restricted their analytic sample to claims for emergency physician services (CPT codes 99281-99285, 99291) delivered at an in-network facility between 2014 and 2017.

Researchers observed a stark and sudden increase in allowed amounts for fully-insured plans in Connecticut coinciding directly with the implementation of the surprise billing law after 2016 Q2. Their findings provide suggestive evidence that Connecticut’s surprise billing law – by pegging the minimum out-of-network payment requirement to the 80th percentile of provider charges – may have driven a substantial increase in allowed amounts paid to emergency physicians from fully-insured plans, which were directly regulated under the law. Specifically, the unadjusted difference-in-difference estimate implies an 18.0% ($55) increase in fully-insured plan allowed amounts in Connecticut relative to control states. Increased allowed amounts are ultimately likely to be passed on to enrollees in the form of higher premiums.

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