Study shows Medicare payments for cardiac imaging are three times higher when services are provided in hospital outpatient departments than in physician offices
first-ever look at full ‘episode of care’ spending for common procedures
administered in different care settings
18, 2016 — A new study comparing Medicare payments for three common
services finds that cardiac imaging payments are more than triple when patients
receive care at a hospital outpatient department instead of a physician’s
office—roughly $2,100 vs. $655, respectively.
Download the Report "Medicare Payment Differentials Across Outpatient Settings of Care" (PDF - 43 pages)
report, prepared by researchers at Avalere Health and released by the
Physicians Advocacy Institute, comes at a time when the federal government
considers major changes in how new off-campus hospital outpatient
departments—called HOPDs—are paid. PAI provided the report to the House Energy
and Commerce Committee, which has asked for feedback on implementing a new
Medicare policy that would create ‘site neutral’ payments—a set amount
regardless of where a patient is treated.
View the letter to the House Energy and Commerce Committee (PDF).
say Medicare’s current approach of paying more for services in hospital-owned
facilities has created a strong incentive for hospitals to acquire physician
practices and build new satellite outpatient departments in order to maximize
their revenue from Medicare.
compared Medicare payments for three common procedures typically performed
either in a hospital outpatient department or a doctor’s office:
echocardiograms, colonoscopies, and evaluation and management services. Even
after adjusting for certain risk factors, the study showed that for all three
types of services, Medicare spends more when patients receive services in a
HOPD instead of a physician office.
study demonstrates that for many common procedures, Medicare spends much less
when patients receive treatment in a physician’s office,” said Kelly Kenney,
PAI executive vice president. “At a time when all Americans are concerned about
rising healthcare costs, it’s heartening to see opportunities for substantial
the first time, 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 this measurement, Medicare’s payments for
echocardiograms averaged $5,148 when provided in HOPDs, but were $2,862 when
provided in a physician’s office.
study suggests that when care is initiated in hospital-owned facilities, more
services follow and these services are also more costly, compared to care
that’s provided in a doctor’s office,” said Kenney. “The payment differential
that begins with the initial service extends and is amplified throughout the
study found that ‘episode-of-care’ payments for colonoscopies and related
services for Medicare patients are nearly 35 percent more when patients
received care in hospital outpatient departments instead of physician offices.
It also showed that payments for evaluation and management services for new
patients were 29 percent more in HOPDs, as opposed to similar visits in
study adds important new information for federal policymakers as they consider
ways to shift care to the most cost-effective settings. According to data from
the federal Agency for Healthcare Research and Quality, more than 7 million
Medicare patients received echocardiograms in 2011.
part of their methodology, Avalere researchers adjusted their findings to
account for certain risk factors and demographic characteristics of patients
who received care in the hospital setting, which can impact the cost of
new site neutral payment policy would affect newly acquired, off-site HOPDs
after Jan. 1, 2017. Existing HOPDs would not be affected.