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Diving brief:
- Employers and private insurers continue to pay more to hospitals for inpatient and outpatient services that Medicare would have reimbursed, according to a new study of a political think tank the RAND company.
- In 2022, private insurers and employers paid on average 254% of what Medicare would have paid for the same health care services — compared to 224% two years ago.
- Health systems often say they raise commercial rates to offset losses from government underpayments, the study found. However, a hospital's market share, rather than Medicare or Medicaid patient population, helped predict prices more accurately, with larger health systems charging higher prices.
Dive overview:
Since 2021, health systems and insurers required to publish price information for their 300 most common procedures as the government pushes to make healthcare prices more transparent.
However, researchers accused hospitals and insurers of not fully complying with the regulations.
Only 34.5% of 2,000 hospitals examined by nonprofit watchdog organization Patient advocate were reputed fully compliant with price transparency rules from January. But, the CMS had only issued 14 notices of civil monetary penalties to noncompliant hospitals as early as February, according to the nonprofit.
The RAND study found Prices for inpatient hospital services were 255% higher than what Medicare paid in 2022, while prices for outpatient hospital services averaged 289%, according to the report, based on an analysis of 4,000 hospitals in 49 states.
Prices for outpatient outpatient services surgery centers were slightly lower, at 170% of Medicare payments.
There were also price differences depending on geographic area. Arkansas, Iowa, Massachusetts, Michigan, and Mississippi kept relative prices below 200 percent of Medicare prices during the study period. However, others had relative prices greater than 300% of those of Medicare. Hospitals in Florida and Georgia negotiated the highest relative rates.
Price transparency could be a tool for employer plan administrators to better negotiate employee benefits. Although employer-sponsored plans cover 160 million Americans, researchers said employers are at a disadvantage when negotiating prices with providers and insurers because of the lack of detailed pricing information.
“The widely varying prices among hospitals suggest that employers have an opportunity to redesign their health plans to better align hospital prices with the value of care provided,” said Brian Briscombe, principal investigator of the Hospital Price Transparency Project. RAND hospitals, in a press release. “However, price transparency alone will not lead to change if employers do not or cannot act on price information. »
State and federal policymakers could rebalance negotiations by cracking down on uncompetitive health care markets, limiting payments for out-of-network hospital care, or allowing employers to opt in to Medicare or other options public, the report indicates.
The nation's largest hospital lobby, the American Hospital Association, has rejected previous analyzes of price data, including reports patient rights advocate.
Monday, Molly Smith, AHA vice president for policy, pushed back against the RAND study, claiming that it was “eerily silent on the hidden influence of commercial insurers in driving up healthcare costs for patients, as evidenced by issues like the recent allegations against MultiPlan.
Last week, community health systems filed suit against MultiPlan alleging that he colluded with insurers to raise prices for patients and reduce payments to providers. This is the third lawsuit against MultiPlan in less than a year.