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Medicare Payments Higher at HOPDs than ASCs, Doc Offices

Analysis  |  By Rene Letourneau  
   February 24, 2016

Cardiac imaging payments are more than triple when a patient receives care at a hospital outpatient department instead of a physician office, roughly $2,100 versus $655, respectively, research shows, but quality was not studied.

Medicare payments for cardiac imaging, colonoscopy, and evaluation and management services are significantly higher when procedures are done in a hospital outpatient department as compared to an ambulatory surgical center or a physician office.

That is the upshot of a recent study conducted by Washington, D.C.-based healthcare consulting firm Avalere Health and funded by the Physicians Advocacy Institute.

Payments Higher for Primary and Follow-up Services

Avalere researchers compared Medicare payments for the three procedures to understand the impact of site of service on payment rates.

"The analysis piece itself looked at Medicare claims data to see payment rates for services across settings of care and episodes of care… We looked not at cost, but at payments," says Carrie Bullock, director of Avalere's reimbursement practice.

"In considering the results, there are two major takeaways. The first is that payment of services at HOPDs are highest among the care sites, which is entirely expected given everything we know about how Medicare pays for services in the hospital setting compared to ASCs and physician offices."

The second key point, Bullock says, is that there also tend to be higher rates of additional services during the episode of care when a patient is treated at an HOPD.

"Payments for services in the HOPD are higher for the primary service, and also for many related services during the episode examined. Thus, the higher payments often associated with a HOPD procedure are not limited to the primary procedure, but can extend to related services performed adjacent to the primary procedure analyzed," the report states.

Medicare Sparks Site-Neutral Payment Showdown

"Second, many HOPD-related procedures tend to be followed by a higher rate of additional procedures in the HOPD setting compared to office-based procedures… Together, these findings suggest that when care is initiated in the typically higher-paying HOPD setting, the services that follow also result in higher spending relative to when care is initiated in the office setting."

While this difference in service mix may be attributable to factors such as severity of illness and the existence of chronic conditions and comorbidities, researchers used a risk-adjusted methodology when conducting the data analysis and still concluded that payment rates are substantially higher for HOPDs.


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Rene Letourneau is a contributing writer at HealthLeaders Media.

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