Hospital outpatient payments lower in states with fixed fees, study finds
- States with no fixed fee schedules are paying more for common hospital outpatient procedures than states with fixed amount fee schedules, according a survey from the Workers Compensation Research Institute. The study shows, for example, that after Connecticut set fees for hospital outpatient surgeries at 210% of the Medicare rate, the average payment per episode dropped by about 14%.
- The study compared workers compensation hospital outpatient payments and Medicare rates for common outpatient surgeries and found states without fee schedules paid between 37-151% more on average than states with fixed fees in 2015. They also had 44%-136% higher payments per episode.
- Payouts for workers’ compensation and Medicare rates varied widely across the 35 surveyed states — from less than Medicare in Massachusetts, New York and Nevada to 527%, or $9,927, above Medicare in Alabama.
The study looks at services provided and billed by hospitals. It does not cover services billed by non-hospital medical professionals, transactions for durable medical equipment and medications billed by non-hospital providers or payments to ambulatory surgery centers.
With cuts to inpatient reimbursement, hospitals are increasingly looking to outpatient and ambulatory opportunities to boost their revenue streams so knowledge of outpatient fee schedules among states is important. Hospital utilization and beds are shrinking, while expenses are on the rise. Organizations that can differentiate themselves from competitors by offering a wide range of outpatient services stand to win big.
According to a recent Advisory Board Company survey, 57% of hospital CEOs said improving access to ambulatory or outpatient settings is their primary concern. An equal share were concerned about reducing expenses, while 55% wanted to increase their share of the outpatient procedures market.
With an eye on boosting outpatient access, some hospitals are turning to retail malls to set up shop. Earlier this month, The Wall Street Journal reported that Dana-Farber Cancer Institute had leased two floors of the Atrium Mall in Chestnut Hills, Mass., to use for patient exams, infusions and support services.
The trend toward outpatient settings and services also meets a growing consumer demand for faster, cheaper and more convenient care. According to a PricewaterhouseCoopers’ Health Research Institute report, there are currently more than 3,000 retail clinics in the U.S. and one in three consumers has visited one. That’s up from 90 clinics and one in 10 consumers in 2006.
- Workers Compensation Research Institute Hospital Outpatient Payments per Episode Higher and Growing Faster in States with Percent-of-Charge Fee Regulations or No Fee Schedules, Finds New WCRI Study