- Health insurance companies pay in total twice as much for knee and hip implants as the average selling price (ASP) that hospitals purchase them from manufacturers, a research letter published in JAMA found.
- The Boston Children's Hospital researchers found the mean insurance payment for knee replacement was $10,604 and the ASP was $5,023. The mean insurance payment for a hip implant was $11,751 while the ASP was $5,619.
- According to the authors, these overpayments get pushed onto customers via higher premium rates, Stat reported.
Health insurers are flying blind paying for these implants, which are generally the largest expense associated with these procedures. The differences between the payments for hip implants and knee replacements insurers end up footing the bill for totals about $425 million.
While primary total knee arthroplasty and primary total hip arthroplasty rank first and eighth among all common U.S. procedures, health insurance companies also pay without knowing the price or the device model, the study authors noted.
In this Wild West scenario, the insurance customer is the one who makes up for the cost difference that insurers surely don't want to pay wholly for. In early February, the Accredited Standards Committee X12, which advises on insurer standards, recommended device identifiers be included on medical claims forms comments. The move was a "critical first step" toward helping regulators, providers and patients track the long-term safety of cardiac stents, artificial hips and pacemakers, among other medical implants.
X12 is also seen as a potential partner for the CMS if implants are included to assist in identifying the costs to Medicare on recalled or defective medical devices. In addition, this tightening up could decrease the high costs insurers are paying for knee and hip implants by tracking devices and knowing more about what they are purchasing.