Variation in Emergency Department vs Internal Medicine Excess Charges in the United States

Abstract

Importance: Uninsured and insured but out-of-network emergency department (ED) patients are often billed hospital chargemaster prices, which exceed amounts typically paid by insurers.

Objective: To examine the variation in excess charges for services provided by emergency medicine and internal medicine physicians.

Design, setting, and participants: Retrospective analysis was conducted of professional fee payment claims made by the Centers for Medicare & Medicaid Services for all services provided to Medicare Part B fee-for-service beneficiaries in calendar year 2013. Data analysis was conducted from January 1 to July 31, 2016.

Main outcomes and measures: Markup ratios for ED and internal medicine professional services, defined as the charges submitted by the hospital divided by the Medicare allowable amount.

Results: Our analysis included 12 337 emergency medicine physicians from 2707 hospitals and 57 607 internal medicine physicians from 3669 hospitals in all 50 states. Services provided by emergency medicine physicians had an overall markup ratio of 4.4 (340% excess charges), which was greater than the markup ratio of 2.1 (110% excess charges) for all services performed by internal medicine physicians. Markup ratios for all ED services ranged by hospital from 1.0 to 12.6 (median, 4.2; interquartile range [IQR], 3.3-5.8); markup ratios for all internal medicine services ranged by hospital from 1.0 to 14.1 (median, 2.0; IQR, 1.7-2.5). The median markup ratio by hospital for ED evaluation and management procedure codes varied between 4.0 and 5.0. Among the most common ED services, laceration repair had the highest median markup ratio (7.0); emergency medicine physician review of a head computed tomographic scan had the greatest interhospital variation (range, 1.6-27.7). Across hospitals, markups in the ED were often substantially higher than those in the internal medicine department for the same services. Higher ED markup ratios were associated with hospital for-profit ownership (median, 5.7; IQR, 4.0-7.1), a greater percentage of uninsured patients seen (median, 5.0; IQR, 3.5-6.7 for ≥20% uninsured), and location (median, 5.3; IQR, 3.8-6.8 for the southeastern United States).

Conclusions and relevance: Across hospitals, there is wide variation in excess charges on ED services, which are often priced higher than internal medicine services. Our results inform policy efforts to protect uninsured and out-of-network patients from highly variable pricing.

Figure 1.. Variation in Markup Ratios by Hospital in Emergency Departments (n = 2707) and Internal Medicine Departments (n = 3669)

Shown are aggregated markup ratios for all services provided by each department in 2013.

Figure 2.. Hospital Characteristics Associated With Higher Markup Ratios in Emergency Departments (n = 2707) and Internal Medicine Departments (n = 3669)

Shown are hospitals’ aggregated markup ratios (median and interquartile range [IQR]) for all services provided in the emergency department (ED) or internal medicine department in 2013. A 1-U increase in the ED markup ratio means that, for every $100 in Medicare-allowable amount billed, the ED charged an additional $100. Multivariable regression coefficients are given in the eTable in the Supplement.