Site-based payment differentials for ambulatory services among individuals with commercial insurance

Abstract

Objective: To compare prices paid by commercial insurers for ambulatory services in physician office and hospital outpatient settings.

Data sources: MarketScan Commercial Claims and Encounters database obtained from Truven Health Analytics.

Study design: We examined ambulatory service claims for a sample of privately insured individuals who were continuously enrolled in a health maintenance organization plan, preferred provider organization plan, high-deductible/consumer-driven health plan, or exclusive provider organization plan in 2018. We categorized services into five categories: Evaluation & Management, Medical Services & Procedures, Pathology/Lab, Radiology, and Surgical. We identified services commonly provided in both outpatient and office settings and computed the price differential between outpatient and office services overall and for each service category, controlling for observable patient characteristics and geography.

Data collection: We examined 89 services (defined by Current Procedural Terminology [CPT] code) that were provided in both office and outpatient settings in our sample (102.7 million claims, 8.3 million individuals).

Principal findings: Adjusting for patient and geographic characteristics and across all services, total payment for an ambulatory service was, on average, 145% higher in a hospital outpatient department than the same service in a physician office. Out-of-pocket spending was 109% higher. Price differences between outpatient and office services were highest for pathology/laboratory services. Patients receiving services in outpatient departments had higher mean risk scores and received more services on the date of their visit (in addition to the index CPT being studied) than patients receiving the same index CPT in a physician's office.

Conclusions: Payments in hospital outpatient departments were significantly higher than payments for the same services in physician offices among commercially insured patients. Policies such as site-neutral payment would lower costs and could reduce incentives for further consolidation in health care markets. Care must be given to adjusting for patient severity across settings.

Keywords: access/demand/utilization of services; ambulatory/outpatient care; anti-trust/health care markets/competition; health care costs; health economics; health policy/politics/law/regulation; hospitals.

FIGURE 1

Weighted mean total payment across sites of care by service category, 2018. Analysis at the claim level for patients aged 18–64 continuously enrolled in one of the following plan types: health maintenance organization plans, preferred provider organization plans, consumer‐driven health plans and high‐deductible health plans, and exclusive provider organization plans. Total payment represents allowed amounts and includes payments on professional and facility claims. Payments are at the service (CPT) level. Weighted mean payment is calculated using CPT‐level payments weighted by total CPT‐level volume. Source: Authors' analysis of 2018 MarketScan data [Color figure can be viewed at wileyonlinelibrary.com]

FIGURE 2

Weighted mean patient out‐of‐pocket payment across sites of care by service category, 2018. Analysis at the claim level for patients aged 18–64 continuously enrolled in one of the following plan types: health maintenance organization plans, preferred provider organization plans, consumer‐driven health plans and high‐deductible health plans, and exclusive provider organization plans. Out‐of‐pockets payment includes payments on professional and facility claims. Payments are at the service (CPT) level. Weighted mean payment is calculated using CPT‐level payments weighted by total CPT‐level volume. Source: Authors' analysis of 2018 MarketScan data [Color figure can be viewed at wileyonlinelibrary.com]