The Reality of Commercial Payer-Negotiated Rates in Cleft Lip and Palate Repair

Abstract

Background: Commercial payer-negotiated rates for cleft lip and palate surgery have not been evaluated on a national scale. The aim of this study was to characterize commercial rates for cleft care, both in terms of nationwide variation and in relation to Medicaid rates.

Methods: A cross-sectional analysis was performed of 2021 hospital pricing data from Turquoise Health, a data service platform that aggregates hospital price disclosures. The data were queried by CPT code to identify 20 cleft surgical services. Within- and across-hospital ratios were calculated per CPT code to quantify commercial rate variation. Generalized linear models were used to assess the relationship between median commercial rate and facility-level variables and between commercial and Medicaid rates.

Results: There were 80,710 unique commercial rates from 792 hospitals. Within-hospital ratios for commercial rates ranged from 2.0 to 2.9 and across-hospital ratios ranged from 5.4 to 13.7. Median commercial rates per facility were higher than Medicaid rates for primary cleft lip and palate repair ($5492.20 versus $1739.00), secondary cleft lip and palate repair ($5429.10 versus $1917.00), and cleft rhinoplasty ($6001.00 versus $1917.00; P < 0.001). Lower commercial rates were associated with hospitals that were smaller ( P < 0.001), safety-net ( P < 0.001), and nonprofit ( P < 0.001). Medicaid rate was positively associated with commercial rate ( P < 0.001).

Conclusions: Commercial rates for cleft surgical care demonstrated marked variation within and across hospitals, and were lower for small, safety-net, or nonprofit hospitals. Lower Medicaid rates were not associated with higher commercial rates, suggesting that hospitals did not use cost-shifting to compensate for budget shortfalls resulting from poor Medicaid reimbursement.

Figure 1.. Commercial rates for cleft surgical services by CPT code.

Variation in commercial rate per CPT (Current Procedural Terminology) code for 80,710 individual hospital-specific commercial plans. See Table 1 and Supplemental Table 1 for descriptions of CPT codes.

Figure 2.. Distribution of median commercial and Medicaid rates per hospital for grouped cleft surgical services.

Median (IQR) Medicaid rates were $1,739.0 9 ($972.0–$3,186.2) for primary cleft lip and palate repair, $1,917.0 ($1,015.7–$3,687.9) for secondary cleft lip and palate repair, and $1,917.0 ($991.5–$3,186.4) for cleft rhinoplasty. CLP, cleft lip and palate.

Figure 3.. Kernel density distributions of commercial rate for cleft surgical services compared to five common plastic surgery procedures.

Comparison of (a) raw commercial rates and (b) median facility commercial rates for cleft procedures (blue) to five common plastic surgery procedures (CPTs 19318, 19357, 19380, 19325, and 19342; see text for CPT code descriptions). CLP, cleft lip and palate. TE, tissue expander.

Figure 3.. Kernel density distributions of commercial rate for cleft surgical services compared to five common plastic surgery procedures.

Comparison of (a) raw commercial rates and (b) median facility commercial rates for cleft procedures (blue) to five common plastic surgery procedures (CPTs 19318, 19357, 19380, 19325, and 19342; see text for CPT code descriptions). CLP, cleft lip and palate. TE, tissue expander.

Figure 4.. Geographic mapping of cleft surgery commercial rates by hospital referral region (HRR).

Aggregate commercial rates (US$) for all cleft procedures are mapped. Alaska and Hawaii are excluded.

Figure 5.. Relationship between Medicaid and commercial rates.

Positive slope of fitted values indicates a lack of cost-shifting effect. Medicaid rates of greater than 10,000 are excluded.