"Importantly, we did account for different primary and comorbid conditions for the people receiving the services because you can imagine that depending on what sort of health conditions the person has, particularly for services that occur both before and after services, payments would be affected in general by the severity of illness. We did account for the person's demographics and other acute and chronic conditions they had when they received services," says Ed Drozd, vice president of Avalere's data analytics practice.
Demonstrably Higher Costs
Even when adjusting for certain risk factors, the analysis shows a steep hike in Medicare payments to HOPDs for the three services studied. For example, cardiac imaging payments are more than triple when a patient receives care at a HOPD instead of a physician office, roughly $2,100 versus $655, respectively.
Further, for echocardiograms and colonoscopies, researchers examined a three-day window, including the day of procedure and one day before and after, and a 22-day window, including the day of the procedure and the seven days before and 14 days after.
The results were significant. For an echocardiogram, average payments are 217% higher in a HOPD for a three-day episode and 80% higher for a 22-day episode. Additionally, average payments are 35% higher for colonoscopies for a 22-day episode in a HOPD setting.
For evaluation and management services, researchers examined two profiles: E&M visits within seven days of hospitalization and E&M visits for new patients. For both, E&M visits that originate in an HOPD are associated with higher payments (22% and 29%, respectively).
Quality Not Considered in Study
While the study points to a significant payment differential between HOPDs and other care settings, it is important to note that the analysis does not factor in quality or outcomes.
"There are significant differences in payments at care sites that deliver services for essentially the same patients and that is what we were focused on. We don't get into the quality piece or the piece of whether the payment differential is justified," says Matthew Katz, a PAI board member and executive vice president and chief executive officer of the Connecticut State Medical Society.
Rene Letourneau is a contributing writer at HealthLeaders Media.