Analysis Group and Stanford University Study Details Impact of California’s “Balance Billing” Law on the Cost of Anesthesia Care

Date:August 17, 2023
Location:Boston, MA
Contact:Eric Seymour
978 273 6049

Researchers from Analysis Group, one of the largest international economics consulting firms, and Stanford University have published a study of the impact on anesthesia care cost of a California law that prohibits “surprise” billing of patients for balances not covered by insurance for patients in fully insured health plans who receive non-emergency care from out-of-network providers working at in-network facilities. The 2017 law’s impact on the cost for anesthesiology services provided in network has been contentious, yet has not been fully studied until now. 

To address the controversy, the study authors evaluated average quarterly county-level payment that was derived from a database of approximately 4.6 million claims spanning the period from 2013 through 2020 for commercially insured patients. The results suggest that the California law’s implementation was associated with a statistically significant decline in payments for out-of-network anesthesia care (by 13.6%, or $108 on average) and an increase in payments for in-network anesthesia care (by 3%, or $87 on average). The analysis did not find a statistically significant change in the portion of claims occurring out of network. Coauthor D. Lee Heavner, a Managing Principal at Analysis Group, said that “the implications of the study go beyond California and shed light on how other legislation, such as the national No Surprises Act, may affect payments in the private insurance market.”

The study, titled “Association Between ‘Balance Billing’ Legislation and Anesthesia Payments in California: A Retrospective Analysis,” was published in the July issue of Anesthesiology. The authors of the study include Anjali Dixit, M.D., Postdoctoral Scholar, Anesthesiology, Perioperative and Pain Medicine, Stanford School of Medicine; Dr. Heavner; Laurence C. Baker, Professor of Health Policy, Economics, and Human Biology at Stanford University School of Medicine and Senior Fellow at the Stanford Institute for Economic Policy Research; and Eric C. Sun, M.D., Assistant Professor of Anesthesiology, Perioperative and Pain Medicine at Stanford School of Medicine.

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About Analysis Group:

Analysis Group is one of the largest international economics consulting firms, with more than 1,200 professionals across 14 offices in North America, Europe, and Asia. Since 1981, we have provided expertise in economics, finance, health care analytics, and strategy to top law firms, Fortune Global 500 companies, and government agencies worldwide. Our internal experts, together with our network of affiliated experts from academia, industry, and government, offer our clients exceptional breadth and depth of expertise.