Neonatology pricing and network participation under state balance billing regulations

Neonatology care can be costly for commercially insured families with minimal opportunities to choose in-network providers. Out-of-network neonatologists may surprise families with balance billings. This study examined the effects of state balance billing laws on neonatology prices and provider network participation.

This study used a quasi-experimental, difference-in-differences design with 7 states that implemented balance billing regulations for out-of-network providers at in-network hospitals.

We used claims data from 2012 to 2019. We analyzed data for patients in fully insured plans who received neonatology services to compare price and surprise billing changes, before and after the policy, relative to controls. The main outcome measures were in-network, out-of-network, and combined total prices, as well as the proportion of claims billed in network to indicate provider network participation.

For both independent dispute resolution (IDR) and benchmark rating approaches, the event studies did not show changes in in-network prices or combined prices, compared with control states, but they showed out-of-network price increases in states with the IDR approach. State-specific analyses indicated mixed results for both IDR and benchmark rating approaches.

The federal No Surprises Act, which went into effect in 2022, has allowed state regulations to continue to govern fully insured plans. We found substantial variation in the effects of state laws on pricing for neonatology services. There was no consistent evidence that state policies influenced prices or network participation of neonatology clinicians.