Concordance of Disclosed Hospital Prices With Total Reimbursements for Hospital-Based Care Among Commercially Insured Patients in the US

Publicly Disclosed Pricing for Common Upper-Extremity Procedures: An Analysis of Hospital Chargemasters

BACKGROUND

American hospitals are required to provide price transparency data (known as a chargemaster) for medical services, which is intended to allow consumers to accurately estimate the cost of medical services. Our purpose was to identify hospital compliance in publishing chargemaster documents and to assess the price information published for common upper-extremity services and procedures.

METHODS

We performed a cross-sectional analysis of publicly available chargemaster data from 122 hospitals, which included the top-20-ranked Honor Roll hospitals from US News and World Report and 2 top-ranked hospitals from each state. Chargemaster files were accessed for each hospital, and price information was recorded for 10 common upper-extremity procedures including radiographs, injections, and surgeries. Mean procedural prices were compared between academic and nonacademic hospitals.

RESULTS

Chargemaster files were able to be accessed for 107 (88%) of 122 institutions. Price estimates for imaging studies were more frequently reported (73%) than those of procedures (23%-41%). With 50 hospitals reporting a price estimate, carpal tunnel injection was the most frequently reported procedure, whereas trigger finger release was the least frequently reported (41% and 23%, respectively). Wide price ranges were noted, with mean charges for a total shoulder arthroplasty listed as US $51 723 (range, US $247-US $364 024). Mean prices between academic and nonacademic hospital systems were similar.

CONCLUSIONS

While most (88%) of the included hospitals have been compliant with publishing their price transparency files, price estimates for common upper-extremity procedures and imaging studies are inconsistently reported and, when present, demonstrate high levels of price variability between and within hospital systems.

Episode-Based Cost Sharing to Prospectively Guarantee Patients' Out-of-Pocket Costs

This Viewpoint proposes episode-based cost sharing as a way to prospectively guarantee out-of-pocket costs for patients while also preventing insurers from absorbing cost differentials created by unexpected complications of care.

Free Flap Reconstruction in the Era of Commercial Price Transparency: What Are We Paying For?

BACKGROUND

Commercial rates for free flap reconstruction were not known publicly before the 2021 Hospital Price Transparency Final Rule. The purpose of this study was to examine commercial facility payments to characterize nationwide variation for microsurgical operations and identify opportunities to improve market effectiveness.

METHODS

A cross-sectional study was performed using 2022 commercial insurance pricing merged with hospital performance data. Facility payment rates were extracted for nine CPT codes for free flap operations. Price variation was quantified by means of across-hospital ratios and within-hospital ratios. Mixed effects linear models evaluated commercial rates relative to value, outcomes, and equity performance metrics, in addition to facility-level factors that included health care market concentration.

RESULTS

A total of 20,528 commercial rates across 675 hospitals were compiled. Across-hospital ratios ranged from 5.85 to 7.95, whereas within-hospital ratios ranged from 1.00 to 1.71. Compared with the lowest scoring hospitals (grade D), hospitals with an outcome grade of A and equity grades of B or C were associated with higher commercial rates ( P < 0.04); there were no significant differences in rate based on value. Higher commercial rates were also associated with nonprofit status and more concentrated markets ( P < 0.006). Lower commercial rates were correlated with safety-net and teaching hospitals ( P < 0.001).

CONCLUSIONS

Commercial rates for free flaps varied substantially both across and within hospitals. Associations of higher commercial rates with less competitive markets, and the lack of consistent association with value and equity, identify market failures. Additional work is needed to improve market efficiency for free flap operations.

Do Insurers With Greater Market Power Negotiate Consistently Lower Prices for Hospital Care? Evidence From Hospital Price Transparency Data

This study examined if greater insurer market power was associated with consistently lower negotiated prices within each hospital for 44 shoppable and emergency procedures, using price transparency data disclosed by 1,506 hospitals in metropolitan areas. We used multi-level fixed effects models to estimate the within-hospital variation in plan-level insurer-negotiated prices (from the largest insurer, the second largest insurer, other major insurers, and nonmajor insurers) and cash-pay prices as a function of insurer market power. For shoppable services, relative to nonmajor insurers, the largest, second largest, and other major insurers negotiated 23%, 16%, and 3% lower prices, respectively, while cash prices were 17% higher. For emergency room visits, while the largest insurers paid 5% less than nonmajor insurers, the second largest and other major insurers did not pay lower prices. Stratified analyses by type of shoppable services found varying magnitudes and patterns of price discounts associated with insurer market power.

Price Transparency for Cervical Spinal Fusion Among High-Performing Spine Centers in the United States

BACKGROUND AND OBJECTIVES

As of January 1, 2021, all US hospitals are required by the Hospital Price Transparency Final Rule (HPTFR) to publish standard charges for all items and services, yet the state of price transparency for cervical spinal fusion is unknown. Here, we assess the nationwide price transparency landscape for cervical spinal fusion among high-performing spine centers in the United States.

METHODS

In this cross-sectional economic evaluation, we queried publicly available price transparency websites of 332 "high-performing" spine centers, as defined by the US News and World Report. We extracted variables including gross charges for cervical spinal fusion, payor options, price reporting methodology, and prices relevant to consumers including listed cash prices and minimum and maximum negotiated charges.

RESULTS

While nearly all 332 high-performing spine surgery centers (99.4%) had an online cost estimation tool, the HPTFR compliance rate was only 8.4%. Gross charges for cervical spinal fusion were accessible for 68.1% of hospitals, discounted cash prices for 46.4% of hospitals, and minimum and maximum charges for 10.8% of hospitals. There were large IQRs for gross charges ($48 491.98-$99 293.37), discounted cash prices ($26 952.25-$66 806.63), minimum charges ($10 766.11-$21 248.36), and maximum charges ($39 280.49-$89 035.35). There was geographic variability in the gross charges of cervical spinal fusion among high-performing spine centers within and between states. There was a significant association between "excellent" discharge to home status and lower mean gross charges.

CONCLUSION

Although online cost reporting has drastically increased since implementation of the HPTFR, data reported for cervical spinal fusion remain inadequate and difficult to interpret by both providers and patients.

Healthcare price transparency in North America and Europe

Healthcare price transparency is an effort to inform patient decision-making, but also to decrease prices and their variation across healthcare systems for equivalent medical services. The initiative is meaningful only for medical services that are shoppable-such as imaging examinations-for which patients incur out-of-pocket costs. Therefore, several countries in which patients commonly share a portion of their healthcare costs have been implementing mandates to improve healthcare price transparency. However, the provisional implementation has many issues, especially in the United States, including provider non-compliance and limited accessibility of price transparency tools by the general public. Many of the existing tools are not user-friendly, are difficult to navigate, focus on charges and health plan negotiated rates rather than patients' out-of-pocket costs, and disclose prices on the service level instead of per episode of care. As such, the disclosed amounts are often not reliable. Many price transparency tools also lack valid and measurable quality metrics, which can result in a selection of high-cost care as a proxy for high-value care, as well as an increase in healthcare prices when providers want to imply they offer high-quality care. Nevertheless, the impact of the initiatives on patients' decision-making and healthcare costs remains unclear. While transparency initiatives are patient-centric, efforts should be made to increase patient engagement, provide accurate patient-specific out-of-pocket cost information, compare available treatment and provider alternatives, and couple price information with quality metrics to enable making fully informed decisions.

Association Between Hospital Monopoly Status, Patient Socioeconomic Disadvantage, and Total Joint Arthroplasty Price Disclosure

INTRODUCTION

In recent years, healthcare institutions and regulatory bodies have enacted cost transparency mandates for routine interventions such as total hip arthroplasty and total knee arthroplasty. However, disclosure rates remain low. This study examined the effect of financial characteristics of hospitals and the socioeconomic status of patients on price disclosure.

METHODS

Hospitals conducting total hip arthroplasty/total knee arthroplasty, their quality ratings, and procedural volumes were identified using the Leapfrog Hospital Survey and linked to procedure-specific prices. Financial performance and the Area Deprivation Index (ADI) were used to correlate disclosure rates with hospital and patient characteristics. Hospital financial, operational, and patient summary statistics were compared by price-disclosure status using two-sample t -tests for continuous variables and Pearson chi-square test for categorical variables. The association between total joint arthroplasty price disclosure and hospital ADI was further evaluated using modified Poisson regression.

RESULTS

A total of 1,425 hospitals certified by the Centers for Medicare & Medicaid Services were identified in the United States. 50.5% (n = 721) of hospitals had no published payer-specific price information. Hospitals in an area of higher socioeconomic disadvantage were more likely to disclose prices of total joint arthroplasty (incidence rate ratio = 0.966, 95% CI: 0.937 to 0.995, P = 0.024). Hospitals that were considered monopolies or were for-profit were less likely to disclose prices (IRR = 1.15, 95% CI: 1.030 to 1.280, P = 0.01; IRR = 1.256, 95% CI: 0.986 to 1.526, P = 0.038, respectively). When accounting for both ADI and monopoly status, hospitals with patients who had a higher ADI were more likely to disclose costs for a total joint arthroplasty, whereas for-profit hospitals or hospitals considered monopolies in their HSA were less likely to disclose prices.

DISCUSSION

For nonmonopoly hospitals, a higher ADI correlated with a higher likelihood of price disclosure. However, for monopoly hospitals, there was no significant association between ADI and price disclosure.

LEVEL OF EVIDENCE

II.

The Relationships Among Cash Prices, Negotiated Rates, And Chargemaster Prices For Shoppable Hospital Services

Hospitals must disclose their cash prices, commercial negotiated rates, and chargemaster prices for seventy common, shoppable services under the hospital price transparency rule. Examining prices reported by 2,379 hospitals as of September 9, 2022, we found that a given hospital's cash prices and commercial negotiated rates both tended to reflect a predetermined and consistent percentage discount from its chargemaster prices. On average, cash prices and commercial negotiated rates were 64 percent and 58 percent of the corresponding chargemaster prices for the same procedures at the same hospital and in the same service setting, respectively. Cash prices were lower than the median commercial negotiated rates in 47 percent of instances, and most likely so at hospitals with government or nonprofit ownership, located outside of metropolitan areas, or located in counties with relatively high uninsurance rates or low median household incomes. Hospitals with stronger market power were most likely to offer cash prices below their median negotiated rates, whereas hospitals in areas where insurers had stronger market power were less likely to do so.

Hospital Prices for Pediatric Tympanostomy Tube Placement and Adenotonsillectomy in 2021

OBJECTIVES

Hospital prices vary substantially for myringotomy with tympanostomy tube placement (M&T) and adenotonsillectomy (T&A). The Centers for Medicare and Medicaid Services recently implemented hospital price transparency requirements to help families make financially informed decisions about where to seek care. We sought to determine price availability and the extent of price variation for these procedures.

METHODS

We performed a cross-sectional analysis of the Turquoise Health Hospital Rates Data Platform, which extracts prices for facility fees from publicly available hospital chargemasters. We determined the proportion of hospitals serving pediatric patients that published payer-specific prices for M&T and T&A. We additionally characterized the extent of variation in payer-specific prices both across and within hospitals.

RESULTS

Approximately 40% (n = 909 of 2,266 hospitals) serving pediatric patients disclosed prices for M&T or T&A. Among disclosing hospitals, across-center ratios (adjusted for Medicare hospital wage indices) ranged from 11.0 (M&T; 10th percentile adjusted median price: $536.80 versus 90th percentile adjusted median price: $5,929.93) to 23.4 (revision adenoidectomy age >12 years; 10th percentile: $393.82 versus 90th percentile: $9,209.88). Median within-center price ratios for procedures ranged from 2.2 to 2.7, indicating that some private payers reimbursed the same hospital more than twice as much as other payers for the same procedure.

CONCLUSION

The majority of hospitals serving pediatric patients were non-compliant with federal requirements to disclose prices for M&T and T&A. Among disclosing hospitals, there was wide variation in payer-specific prices between and within institutions. Further research is necessary to understand whether disclosure of prices will enable families to make more financially informed decisions.

LEVEL OF EVIDENCE

3 Laryngoscope, 133:948-955, 2023.

Achieving greater value for veterans through full cost transparency in primary care

The COVID-19 pandemic has led to increased use of telephone and video encounters in the Veterans Health Administration and many other healthcare systems. One important difference between these virtual modalities and traditional face-to-face encounters is the different cost-sharing, travel costs, and time costs that patients face. Making the full costs of different visit modalities transparent to patients and their clinicians can help patients obtain greater value from their primary care encounters. From April 6, 2020 to September 30, 2021 the VA waived all copayments for Veterans receiving care from the VA, but since this policy was temporary it is important that Veterans receive personalized information about their expected costs so they can obtain the most value from their primary care encounters. To test the feasibility, acceptability, and preliminary effectiveness of this approach, our team conducted a 12 week pilot project at the VA Ann Arbor Healthcare System from June-August 2021 in which we made personalized estimates of out-of-pocket, travel, and time costs available and transparent to patients and clinicians in advance of scheduled encounters and at the point of care. We found that it was feasible to generate and deliver personalized cost estimates in advance of visits, that this information was acceptable to patients, and that patients who used cost estimates during a visit with a clinician found this information helpful and would want to receive it again in the future. To achieve greater value in healthcare, systems must continue to pursue new ways to provide transparent information and needed support to patients and clinicians. This means ensuring clinical visits provide the highest levels of access, convenience, and return on patients' healthcare-associated spending while minimizing financial toxicity.

Large Variations in the Prices of Urologic Procedures at Academic Medical Centers 1 Year After Implementation of the Price Transparency Final Rule

Importance

Patients with urologic diseases often experience financial toxicity, defined as high levels of financial burden and concern, after receiving care. The Price Transparency Final Rule, which requires hospitals to disclose both the commercial and cash prices for at least 300 services, was implemented to facilitate price shopping, decrease price dispersion, and lower health care costs.

Objective

To evaluate compliance with the Price Transparency Final Rule and to quantify variations in the price of urologic procedures among academic hospitals and by insurance class.

Design, Setting, and Participants

This was a cross-sectional study that determined the prices of 5 common urologic procedures among academic medical centers and by insurance class. Prices were obtained from the Turquoise Health Database on March 24, 2022. Academic hospitals were identified from the Association of American Medical Colleges website. The 5 most common urologic procedures were cystourethroscopy, prostate biopsy, laparoscopic radical prostatectomy, transurethral resection of the prostate, and ureteroscopy with laser lithotripsy. Using the corresponding Current Procedural Terminology codes, the Turquoise Health Database was queried to identify the cash price, Medicare price, Medicaid price, and commercial insurance price for these procedures.

Exposures

The Price Transparency Final Rule, which went into effect January 1, 2021.

Main Outcomes and Measures

Variability in procedure price among academic medical centers and by insurance class (Medicare, Medicaid, commercial, and cash price).

Results

Of 153 hospitals, only 20 (13%) listed a commercial price for all 5 procedures. The commercial price was reported most often for cystourethroscopy (86 hospitals [56%]) and least often for laparoscopic radical prostatectomy (45 hospitals [29%]). The cash price was lower than the Medicare, Medicaid, and commercial price at 24 hospitals (16%). Prices varied substantially across hospitals for all 5 procedures. There were significant variations in the prices of cystoscopy (χ23 = 85.9; P = .001), prostate biopsy (χ23 = 64.6; P = .001), prostatectomy (χ23 = 24.4; P = .001), transurethral resection of the prostate (χ23 = 51.3; P = .001), and ureteroscopy with laser lithotripsy (χ23 = 63.0; P = .001) by insurance type.

Conclusions and Relevance

These findings suggest that, more than 1 year after the implementation of the Price Transparency Final Rule, there are still large variations in the prices of urologic procedures among academic hospitals and by insurance class. Currently, in certain situations, health care costs could be reduced if patients paid out of pocket. The Centers for Medicare & Medicaid Services may improve price transparency by better enforcing penalties for noncompliance, increasing penalties, and ensuring that hospitals report prices in a way that is easy for patients to access and understand.

Complex Billing for Nonemergency Outpatient Imaging: An Obstacle to the Success of Health Care Price Transparency Initiatives

PURPOSE

Recent price transparency initiatives have considerable limitations, notably due to the complexity of health care products. A single care encounter often consists of several services that may be performed by numerous clinicians and health care facilities that bill independently. The objective of this study was to describe the complexity in billing for nonemergency, noninvasive outpatient imaging and its variation across care delivery settings and imaging modalities.

METHODS

Using billing records from the 2019 IBM MarketScan Commercial Database, the authors examined the number of billing entities involved in outpatient imaging encounters and the sets of relevant items and services for which patients were billed.

RESULTS

In total, 5,210,129 imaging encounters were analyzed. Patients received bills from multiple billing entities for 70.9% of hospital-based encounters, 4.5% of office-based encounters, and 7.6% of encounters at imaging centers. Contrast agent was billed separately from the imaging procedures in 55.9%, 71.5%, and 55.3% of encounters for contrast imaging at hospitals, offices, and imaging centers, respectively. Billing for other ancillary items and services (facility fees, 3-D reconstruction, anesthesia and sedation) was relatively rare.

CONCLUSIONS

Two key aspects of billing complexity may make obtaining complete and reliable price estimates before receiving outpatient imaging difficult for patients: the number of billing entities involved in care delivery and billing for fees and ancillary services beyond the primary imaging procedure. Given that price transparency initiatives are aimed primarily at helping patients anticipate the total cost of their care, policymakers, payers, and providers should take additional steps to provide patients with reliable information on the prices of entire care experiences.

Current Controversies in Radiology on Cost, Reimbursement, and Price Transparency: AJR Expert Panel Narrative Review

Many believe that fundamental reform of the U.S. healthcare system is overdue and necessary given rising national healthcare expenditures, poor performance on key population health metrics, meaningful health disparities, concerns about potential financial toxicity of care, inadequate price transparency, pending insolvency of Medicare Part A, increasing commercial insurance premiums, and significant uninsured and underinsured populations. The Medicare Payment Advisory Commission (MedPAC), an independent congressional agency, believes that part of this reform includes redistribution of reimbursements away from specialties such as radiology. Thus, despite an increase in the Medicare population and spending, Medicare payments for medical imaging have been decreasing for years. Further, the No Surprises Act, a federal law intended to curb the problem of surprise medical billing, was re-purposed in federal rule-making to reduce reimbursement from commercial payers to certain specialties including radiology. In this article, we examine challenges facing the U.S. healthcare system, focusing on cost, reimbursement, and price transparency, and the role of radiology in addressing such challenges. Medical imaging is a minor contributor to national healthcare expenditures, but provides an outsized impact on patient care. The radiology community should work together to demonstrate the value of medical imaging and reduce inappropriate utilization of low-value care.