Research shows how much hospitals and clinics still pay for the same care
Fraud, waste and abuse remain rampant in the U.S. health care system, according to trends detailed in a new report from market research firm Trilliant Health.
Many of the trends identified in the report relate to opaque payment practices. These practices create widespread and often unexplained differences in how hospitals and clinicians are paid for the same care, and some providers and health plans quietly get paid much more than others for providing the exact same services.
The report states that understanding who gets paid what and why is critical to addressing widespread inefficiencies and inequities across the health care system.
Academic medical centers often negotiate higher payment rates than safety net hospitals, reports show. For example, the commercially negotiated rate for CPT 99283 (emergency department visit with moderate complexity evaluation and management) is significantly higher at an academic medical center than at a safety net hospital located in the same region.
The size of these payment gaps varies by region. The incidence rate at academic medical centers was 6.4 times that of Houston, 4.8 times that of Los Angeles, and 1.8 times that of New York City.
Academic medical centers may negotiate higher rates by pointing to the different cost structures they face compared with other hospitals, such as training programs, research programs and highly specialized services, said Allison Oakes, chief research officer at Trilliant.
She noted that safety net hospitals face a different set of challenges, such as high volumes of uncompensated care and a higher payer mix for government funding.
“As a general principle, academic medical centers have access to more expert resources to obtain better rates. Whether the advent of health plan price transparency enables safety net hospitals to negotiate better rates remains to be seen,” Oaks said.
In addition to academic medical centers, some commercial payers (i.e., UnitedHealthcare) have also found ways to get paid significantly more than their peers.
For example, Trilliant's report found that UnitedHealthcare tends to pay higher reimbursement rates to Houston's Kelsey Seybold Clinic, its affiliated provider through Optum Health, than to other unaffiliated providers in the same market. Kelsey Seybold's general outpatient visit rates are approximately 5% to 70% higher than rates for the same services at other clinics in the area.
For UnitedHealthcare, it's relatively easy to get out of this predicament. Oakes explained that because of the Affordable Care Act's minimum medical loss ratio requirements, it would be “economically unreasonable and possibly a breach of the company's fiduciary duty” if UnitedHealthcare did not pay Optum Health providers more than other providers.
“At the same time, as plan sponsors, employers have a fiduciary responsibility for health care costs, and the advent of health plan price transparency could cause each of them to question the value for money provided by their health plan,” she commented.
As these disparities persist, the case for better policies that reveal what hospitals and payers actually charge and pay becomes stronger.
Photo: Afry Harvy, Getty Images
