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Data: TeamHealth letter to senators; Note: Numbers don't include Blue Cross Blue Shield insurers; Chart: Axios Visuals

Physician staffing firm TeamHealth sent thousands of surprise medical bills to patients in 2017, a strategy used to obtain higher payment rates from insurers, according to a letter from the company sent to a group of senators in March, which was obtained by Axios.

Why it matters: These bills can be unaffordable for the small portion of TeamHealth's patients who receive them, and the subsequently high in-network rates raise premiums for everyone.

By the numbers: In the letter, TeamHealth president and CEO Leif Murphy reported balance billing 0.16% of patients overall in 2017, but that includes patients who have government insurance.

  • Among those with private coverage, 0.71% received balance bills. And among those patients who had commercial coverage but were out of network, 3.57% were balance billed.
  • The average balance bill in 2017 was $529, excluding patient cost-sharing obligations — which can quickly add up. But only 30% of patients who were balance billed paid, either partially or in full.

In the same letter, Murphy said TeamHealth provides emergency care to 16 million patients a year, and 26% of its patients have commercial insurance. If .71% of them receive balance bills, that's nearly 30,000 people.

  • "Actually following through and balance billing 3.6% of [out-of-network] treated patients is a substantial amount," said Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy.

How it works: "Balance billing yields immaterial revenue for TeamHealth and is not performed with the objective of enhancing revenue," Murphy wrote in the March letter. "Rather ... balance billing is our only available source of contract negotiating leverage."

  • That leverage leads to in-network rates that are multiple times what Medicare pays. TeamHealth collects, on average, $350 per visit by a commercially insured patient, and only $145 from a Medicare enrollee.
  • It collects significantly less from Medicaid beneficiaries and uninsured patients, which collectively make up about half of its patient volume.

Yes, but: TeamHealth says it no longer practices balance billing.

  • "TeamHealth has a longstanding policy against balance billing... To the extent balance billing occurs from a TeamHealth facility, it is rare and unintended," Blackstone's Wayne Berman, head of global government affairs, wrote in a letter to the Energy and Commerce Committee in October.
  • Blackstone acquired TeamHealth in 2017.
  • A spokesperson for TeamHealth declined to comment further.

What they're saying: “Maybe I’m Bambi-esque, but I think holding a gun to patients’ heads to get 425% of Medicare rates just seems wrong. And at some point, enough is enough," said Zack Cooper, a Yale professor.

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