Association between “Balance Billing” Legislation and Anesthesia Payments in California: A Retrospective Analysis

Abstract

Background Insured patients who receive out-of-network care may receive a “balance bill” for the difference between the practitioner’s charge and their insurer’s contracted rate. In 2017, California banned balance billing for anesthesia care. We examined the association between California’s law and subsequent payments for anesthesia care. We hypothesized that following the law’s implementation, there would be no change in-network payment amounts, and that out-of-network payment amounts and the portion of claims occurring out-of-network would decline. Methods We used average, quarterly, California county-level payment data (2013-2020) derived from a claims database of commercially-insured patients. Using a difference-in-differences approach, we estimated the change in payment amounts for intraoperative/intrapartum anesthesia care, along with the portion of claims occurring out-of-network, following the law’s implementation. The comparison group was office visit payments, expected to be unaffected by the law. We prespecified that we would refer to differences of ≥10% as policy significant. Results Our sample consisted of 43,728 procedure code-county-quarter-network combinations aggregated from 4,599,936 claims. The law’s implementation was associated with a significant 13.6% decline in payments for out-of-network anesthesia care (95%CI -16.5 to -10.6%; p<0.001), translating to an average $108 decrease across all procedures (95%CI -$149 to -$64). There was a statistically significant 3.0% increase in payments for in-network anesthesia care (95%CI 0.9 to 5.1%; p=0.007), translating to an average $87 increase (95%CI $64 to $110), which may be notable in some circumstances but did not meet our threshold for identifying a change as policy significant. There was a non-statistically significant increase in the portion of claims occurring out-of-network (10.0%, 95%CI -4.1 to 24.2%, p=0.155). Conclusions California’s balance billing law was associated with significant declines in out-of-network anesthesia payments in the first three years following implementation. There were mixed statistical and policy significant results for in-network payments and the proportion of out-of-network claims.