Medicare reimbursement for cardiac imaging isn't just dramatically higher in a hospital outpatient department, compared to a physician's office: It's an entire episode-of-care cost level higher. At least that's what an Avalare Health analysis released Thursday (PDF) and funded by the Physicians Advocacy Institute (PAI) found.
The analysis found that Medicare paid hospital outpatient departments triple the amount they paid physicians' offices for cardiac imaging, an average of $2,100 versus $655.
Researchers also looked at Medicare's payments for an entire episode of care—the full 22-day period encompassing preparatory and follow-up care for a given procedure. Under that measurement, Medicare's payments for echocardiograms averaged $5,148 when provided in a hospital outpatient department, versus $2,862 when provided in a physician's office.
PAI claims this is the first attempt to analyze pay differences between hospital outpatient departments and physicians' office for a full episode of care versus a procedure.
The study comes the day before the comment deadline (PDF) on how the House Energy and Commerce Committee should implement Section 603 of the Bipartisan Budget Act of 2015, which established a site-neutral payment policy for newly acquired, provider-based, off-campus hospital outpatient departments after November 2, 2016.
The provision sets the CMS definition for provider-based, off-campus hospital outpatient departments as facilities not on or within 250 yards of a hospital's main campus. The provision, meant to equalize payments starting Jan. 1, 2017, grandfathered existing outpatient buildings, but not those under construction.
The point of the analysis is to further highlight payment discrepancies. Also, even if Section 603 is fully implemented, the pay differences would still continue for older physician offices serving as off-campus hospital outpatient departments, Kelly Kenney, executive vice president at the Physicians Advocacy Institute said.
Eliminating the pay differences all together would be an opportunity for substantial savings, Kenney said.
She said she is hopeful that the analysis will be viewed as unbiased and informative. Even though PAI funded the research, Avalere Health had full editorial control of its content, she said. Also, the consulting firm performed risk adjustments for patients treated in the two settings. A common criticism has been that providers will complain about the pay differences between the two settings without acknowledging that patients seeking care at a hospital outpatient facility may be sicker.
Some still expressed skepticism about the findings. For instance, Lawrence Vernaglia, partner and chairman of the health care industry team at law firm Foley & Lardner, wondered if Avalere performed its risk adjustments correctly, accounting for all the differences that there might be between a patient who receives treatment in a physician's office versus a hospital outpatient setting.
“The risk is that people will read the headline, not the data,” Vernaglia said. “Comparing payments for patients that may not be comparable isn't right.”
Others had similar responses. Julius Hobson, a senior policy advisor at Polsinelli, said he wondered if the study also took into account that hospital outpatient facilities tend to include residency training in their costs.
Hospital groups slammed the report, saying it added nothing new to congressional review of hospital outpatient department (HOPD) payment cuts. "Rather, it states the obvious: HOPD payments exceed those to physician practices. But it leaves out the many valid reasons for this difference—reasons related to giving vulnerable patients and underserved communities access to needed care," Beth Feldpush, senior vice president of policy and advocacy at America's Essential Hospitals said in an e-mail.
In an election year with a shorter legislative session, it's unlikely that Congress will take any additional action on site-neutral payments this year anyway, Hobson added.
