Outpatient apheresis billing: A photopheresis model shows that hospital price transparency data remain difficult to interpret

OBJECTIVES

The US health care payment system is complex and difficult to interpret. Although federal regulations require that more data, in the form of charges and negotiated rates, be made available, compliance remains variable. We review chargemaster and negotiated rate values for extracorporeal photopheresis (ECP) to assess this variability. We sought to determine the availability of chargemaster and negotiated rates for health care consumers and to assess compliance and pricing among institutions using ECP as a model for apheresis billing.

METHODS

We obtained ECP chargemaster data and negotiated rates from 20 institutions. We analyzed the availability of ECP chargemaster data and compared values with a previously published historic cohort. We evaluated the availability of negotiated rates and determined relative reimbursement using charge to reimbursement ratios. We determined calculated fines for hospitals based on bed size.

RESULTS

Chargemaster availability increased from 2019 to 2022, though only 65% (13/20) of hospitals had both chargemaster and negotiated rate data. Chargemaster prices increased significantly from 2019 to 2022 (range, $3,586.83-$34,043.00). We reviewed 1,191 negotiated rates, with institutions averaging 93.6 different rates (SD, 189.5). Negotiated rates were variable, ranging from $3,586.83 to $34,043.00 per procedure. Reimbursement was higher among private insurers compared with reported Centers for Medicare & Medicaid Services negotiated rates. Of the 35% (7/20) that lacked chargemaster and negotiated rates, institutions faced an average annual fine of $1,430,800.

CONCLUSIONS

Despite recent financial penalties, ECP pricing data are often unavailable or inadequate. Current available resources are unlikely to benefit the average health care consumer who requires ECP.

Post-COVID trends in hospital financial performance: updated data from California paint an improved but challenging picture for hospitals and commercially insured patients

The COVID-19 pandemic caused major disruptions to the operation and financing of US acute care hospitals. Previous research has documented early effects of the COVID pandemic on hospital financial performance. This paper updates the literature with current data on utilization and financial performance for a large sample of California hospitals covering the period 2017 through the end of 2022 and the first quarter of 2023. The data show that, while hospital overall utilization has largely returned to pre-COVID levels, patient mix has changed and financial performance still lags. Hospital net income margins remain below pre-COVID levels which could trigger price increases to commercially insured patients to offset continuing post-COVID financial shortfalls.

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.

Do State Bans of Most-Favored-Nation Contract Clauses Restrain Price Growth? Evidence From Hospital Prices

Policy Points Looking for a way to curtail market power abuses in health care and rein in prices, 20 states have restricted most-favored-nation (MFN) clauses in some health care contracts. Little is known as to whether restrictions on MFN clauses slow health care price growth. Banning MFN clauses between insurers and hospitals in highly concentrated insurer markets seems to improve competition and lead to lower hospital prices.

CONTEXT

Most-favored-nation (MFN) contract clauses have recently garnered attention from both Congress and state legislatures looking for ways to curtail market power abuses in health care and rein in prices. In health care, a typical MFN contract clause is stipulated by the insurer and requires a health care provider to grant the insurer the lowest (i.e., the most-favored) price among the insurers it contracts with. As of August 2020, 20 states restrict the use of MFN clauses in health care contracts (19 states ban their use in at least some health care contracts), with 8 states prohibiting their use between 2010 and 2016.

METHODS

Using event study and difference-in-differences research designs, we compared prices for a standardized hospital admission in states that banned MFN clauses between 2010 and 2016 with standardized hospital admission prices in states without MFN bans.

FINDINGS

Our results show that bans on MFN clauses reduced hospital price growth in metropolitan statistical areas (MSAs) with highly concentrated insurer markets. Specifically, we found that mean hospital prices in MSAs with highly concentrated insurer markets would have been $472 (2.8%) lower in 2016 had the MSAs been in states that banned MFN clauses in 2010. In 2016, the population in our sample that resided in MSAs with highly concentrated insurer markets was just under 75 million (23% of the US population). Hence, banning MFN clauses in all MSAs in our sample with highly concentrated insurer markets in 2010 would have generated savings on hospital expenditures in the range of $2.4 billion per year.

CONCLUSIONS

Our empirical findings suggest banning MFN clauses between insurers and providers in highly concentrated insurer markets would improve competition and lead to lower prices and expenditures.

Do high-deductible health plans affect price paid for childbirth?

OBJECTIVE

To test whether out-of-pocket costs and negotiated hospital prices for childbirth change after enrollment in high-deductible health plans (HDHPs) and whether price effects differ in markets with more hospitals.

DATA SOURCES

Administrative medical claims data from 2010 to 2014 from three large commercial insurers with plans in all U.S. states provided by the Health Care Cost Institute (HCCI).

STUDY DESIGN

I identify employer groups that switched from non-HDHPs in 1 year to HDHPs in a subsequent year. I estimate enrollees' change in out-of-pocket costs and negotiated hospital prices for childbirth after HDHP switch, relative to a comparison group of employers that do not switch plans. I use a triple-difference design to estimate price changes for enrollees in markets with more hospital choices. Finally, I re-estimate models with hospital-fixed effects.

DATA COLLECTION

From the HCCI sample, childbearing women enrolled in an employer-sponsored plan with at least 10 people.

PRINCIPAL FINDINGS

Switching to an HDHP increases out-of-pocket cost $227 (p < 0.001; comparison group base $790) and has no meaningful effect on hospital-negotiated prices (-$26, p = 0.756; comparison group base $5821). HDHP switch is associated with a marginally statistically significant price increase in markets with three or fewer hospitals ($343, p = 0.096; comparison group base $5806) and, relative to those markets, with a price decrease in markets with more than three hospitals (-$512; p = 0.028). Predicted prices decrease from $5702 to $5551 after HDHP switch in markets with more than three hospitals due primarily to lower prices conditional on using the same hospital.

CONCLUSIONS

Prices for childbirth in markets with more hospitals decrease after HDHP switch due to lower hospital prices for HDHPs relative to prices at those same hospitals for non-HDHPs. These results reinforce previous findings that HDHPs do not promote price shopping but suggest negotiated prices may be lower for HDHP enrollees.

How Do the Hospital Prices Paid by Medicare Advantage Plans and Commercial Plans Compare With Medicare Fee-for-Service Prices?

The prices that private insurers pay hospitals have received considerable attention in recent years, but most of that literature has focused on the commercially insured population. Although nearly one-third of Medicare beneficiaries are enrolled in a Medicare Advantage (MA) plan, little is known about the prices paid to hospitals by the private insurers that administer such plans. More information on the hospital prices paid by MA plans would provide additional insights into whether MA prices are more closely tied to Medicare fee-for-service (FFS) prices or commercial prices. Moreover, information on whether the hospital prices paid by MA plans vary with market characteristics or other factors would be useful for evaluating the performance of the MA program and analyzing proposals to modify it. In this study, we compared the hospital prices paid by MA plans and commercial plans with Medicare FFS prices using 2013 claims from the Health Care Cost Institute (HCCI) database. The HCCI claims were used to calculate hospital prices for private insurers, and Medicare's payment rules were used to estimate Medicare FFS prices. We focused on stays at acute care hospitals in metropolitan statistical areas (MSAs). We found MA prices to be roughly equal to Medicare FFS prices, on average, but commercial prices were 89% higher than FFS prices. In addition, commercial prices varied greatly across and within MSAs, but MA prices varied much less.

Hospital Prices Increase in California, Especially Among Hospitals in the Largest Multi-hospital Systems

A surge in hospital consolidation is fueling formation of ever larger multi-hospital systems throughout the United States. This article examines hospital prices in California over time with a focus on hospitals in the largest multi-hospital systems. Our data show that hospital prices in California grew substantially (+76% per hospital admission) across all hospitals and all services between 2004 and 2013 and that prices at hospitals that are members of the largest, multi-hospital systems grew substantially more (113%) than prices paid to all other California hospitals (70%). Prices were similar in both groups at the start of the period (approximately $9200 per admission). By the end of the period, prices at hospitals in the largest systems exceeded prices at other California hospitals by almost $4000 per patient admission. Our study findings are potentially useful to policy makers across the country for several reasons. Our data measure actual prices for a large sample of hospitals over a long period of time in California. California experienced its wave of consolidation much earlier than the rest of the country and as such our findings may provide some insights into what may happen across the United States from hospital consolidation including growth of large, multi-hospital systems now forming in the rest of the rest of the country.