Determinants of Commercial Prices for Common Radiation Therapy Procedures

Assessment of Price Variation in Coronary Artery Bypass Surgery at US Hospitals

BACKGROUND

Little is known about hospital pricing for coronary artery bypass grafting (CABG). Using new price transparency data, we assessed variation in CABG prices across US hospitals and the association between higher prices and hospital characteristics, including quality of care.

METHODS AND RESULTS

Prices for diagnosis related group code 236 were obtained from the Turquoise database and linked by Medicare Facility ID to publicly available hospital characteristics. Univariate and multivariable analyses were performed to assess factors predictive of higher prices. Across 544 hospitals, median commercial and self-pay rates were 2.01 and 2.64 times the Medicare rate ($57 240 and $75 047, respectively, versus $28 398). Within hospitals, the 90th percentile insurer-negotiated price was 1.83 times the 10th percentile price. Across hospitals, the 90th percentile commercial rate was 2.91 times the 10th percentile hospital rate. Regional median hospital prices ranged from $35 624 in the East South Central to $84 080 in the Pacific. In univariate analysis, higher inpatient revenue, greater annual discharges, and major teaching status were significantly associated with higher prices. In multivariable analysis, major teaching and investor-owned status were associated with significantly higher prices (+$8653 and +$12 200, respectively). CABG prices were not related to death, readmissions, patient ratings, or overall Centers for Medicare and Medicaid Services hospital rating.

CONCLUSIONS

There is significant variation in CABG pricing, with certain characteristics associated with higher rates, including major teaching status and investor ownership. Notably, higher CABG prices were not associated with better-quality care, suggesting a need for further investigation into drivers of pricing variation and the implications for health care spending and access.

Playing by the Rules? Tracking U.S. Hospitals' Responses to Federal Price Transparency Regulation

GOAL

As of January 1, 2021, the Centers for Medicare & Medicaid Services requires most U.S. hospitals to publish pricing information on their website to help consumers make decisions regarding services and to transform negotiations with health insurers. For this study, we evaluated changes in hospitals' compliance with the federal price transparency rule after the first year of enactment, during which the Centers for Medicare & Medicaid Services increased the penalty for noncompliance.

METHODS

Using a nationally representative random sample of 470 hospitals, we assessed compliance with both parts of the hospital transparency rule (publishing a machine-readable price database and a consumer shopping tool) in the first quarter of 2022 and compared its baseline level in the first quarter of 2021. Using data from the American Hospital Association and Clarivate, we next assessed how compliance varied by hospital factors (ownership, number of beds, system membership, teaching status, type of electronic health record system), market factors (hospital and insurer market concentration), and the estimated change in penalty for noncompliance.

PRINCIPAL FINDINGS

By early 2022, 46% of hospitals had posted both machine-readable and consumer-shoppable data, an increase of 24% from the prior year. Almost 9 in 10 hospitals had complied with the consumer-shoppable data requirement by early 2022. Larger hospitals and public hospitals had lower probabilities of baseline compliance with the machine-readable and consumer-shoppable requirements, respectively, although public hospitals were significantly more likely to become compliant with the consumer-shoppable requirement by 2022. Higher hospital market concentration was also associated with higher baseline compliance for both the machine-readable and consumer-shoppable requirements. Furthermore, our analyses found that hospitals with certain electronic health record systems were more likely to comply with the consumer-shoppable requirement in 2021 and became increasingly compliant with the machine-readable requirement in 2022. Finally, we found that hospitals with a larger estimated penalty were more likely to become compliant with the machine-readable requirement.

PRACTICAL APPLICATIONS

Longitudinal analyses of compliance with the federal price transparency rule are valuable for monitoring changes in hospitals' behavior and assessing whether compliance changes vary systematically for specific types of hospitals and/or market structures. Our results suggest a trend toward increased hospital compliance between 2021 and 2022. Although hospitals perceive the consumer-shopping tools as being the most impactful, the value of this information depends on whether it is comprehensible and comparable across hospitals. The new price transparency rule has facilitated the creation of new data that have the potential to significantly alter the competitive landscape for hospitals and may require hospital leaders to consider how their organizational strategies change concerning their engagement with payers and patients. Finally, greater price transparency is likely to bolster national policy discussions related to price variation, affordability, and the role of regulation in healthcare markets.

Benchmarking the Radiation Oncology Alternative Payment Model: Changes in Medicare Reimbursement for 16 Common Radiation Therapy Treatment Courses

Radiation oncology (RO) has seen declines in Medicare reimbursement (MCR) in the past decade under the current fee-for-service model. Although studies have explored decline in reimbursement at a per-code level, to our knowledge there are no recent studies analyzing changes in MCR over time for common RO treatment courses. By analyzing changes in MCR for common treatment courses, our study had 3 objectives: (1) to provide practitioners and policymakers with estimates of recent reimbursement changes for common treatment courses; (2) to provide an estimate of how reimbursement will change in the future under the current fee-for-service model if current trends continue; and (3) to provide a baseline for treatment episodes in the event that the episode-based Radiation Oncology Alternative Payment Model is eventually implemented. Specifically, we quantified inflation- and utilization-adjusted changes in reimbursement for 16 common radiation therapy (RT) treatment courses from 2010 to 2020. Centers for Medicare & Medicaid Services Physician/Supplier Procedure Summary databases were used to obtain reimbursement for all RO procedures in 2010, 2015, and 2020 for free-standing facilities. Inflation-adjusted average reimbursement (AR) per billing instance was calculated for each Healthcare Common Procedure Coding System code using 2020 dollars. For each year, the billing frequency of each code was multiplied by the AR per code. Results were summed per RT course per year, and AR for RT courses were compared. Sixteen common RO courses for head and neck, breast, prostate, lung, and palliative RT were analyzed. AR decreased for all 16 courses from 2010 to 2020. From 2015 to 2020, the only course that increased in AR was palliative 2-dimensional 10-fraction 30 Gy, which increased by 0.4%. Courses using intensity modulated RT saw the largest AR decline from 2010 to 2020, ranging from 38% to 39%. We report significant declines in reimbursement from 2010 to 2020 for common RO courses, with the largest declines for intensity modulated RT. Policymakers should consider the significant cuts to reimbursement that have already occurred when considering future reimbursement adjustment under the current fee-for-service model or when considering mandatory adoption of a new payment system with further cuts and the negative effect of such cuts on quality and access to care.