Emergency room patients routinely overcharged, study finds

An analysis of billing records for more than 12,000 emergency medicine doctors across the United States shows that charges varied widely, but that on average, adult patients are charged 340 percent more than what Medicare pays for services ranging from suturing a wound to interpreting a head CT scan.

A report of the study’s findings, published in JAMA Internal Medicine, also notes that the largest hospitals markups are more likely made to minorities and uninsured patients.

“There are massive disparities in service costs across emergency rooms and that price gouging is the worst for the most vulnerable populations,” says Martin Makary, M.D., M.P.H., professor of surgery at the Johns Hopkins University School of Medicine and the study’s senior investigator. “This study adds to the growing pile of evidence that to address the huge disparities in health care, health care pricing needs to be fairer and more transparent,” adds Makary, whose widely published research focuses on health care costs and disparities.

For the study, Makary and his team obtained Medicare billing records for 12,337 emergency medicine physicians practicing in nearly 300 hospitals all 50 states in 2013 to determine how much emergency departments billed for services compared to the Medicare allowable amount.

The Medicare allowable amount is the sum of what Medicare pays, the deductible and coinsurance that patients pay, and the amount any third party such as the patient pays.

In addition, using the 2013 American Hospital Association database, the research team identified size, urban/rural status, teaching status, for-profit status, regional location and safety-net hospital status for each emergency medicine department whose billing data were made part of the analysis. Using the zip code for each emergency department, the researchers also estimated poverty rates, uninsured status and minority populations for those using each emergency room, based on data from the 2013 U.S. Census Bureau.

The researchers then calculated each service bill’s markup ratio, defined as the relationship between the billed charges and the Medicare allowable amount. For example, a markup ratio of 4.0 means that for a service with a Medicare allowable amount of $100, the hospital charged $400, or 300% over the Medicare allowable amount.

Makary and his team found that emergency departments charged anywhere from 1.0-12.6 times ($100-$12,600) more than what Medicare paid for services. On average, emergency medicine doctors had a markup ratio of 4.4 (340 percent in excess charges), or emergency medicine physician charges of $4 billion versus $898 million in Medicare allowable amounts.

The researchers also analyzed billing information for 57,607 general internal medicine physicians 3,669 hospitals in all 50 states to determine whether any markup differences, and how much, existed between emergency medicine physicians practicing in a hospital’s ER, and general internal medicine physicians who see patients at hospitals.

On average, charges were greater when a service was performed by an emergency medicine physician rather than a general internal medicine physician. Overall, general internal medicine physicians had an average markup ratio of 2.1 compared to the Medicare allowable amount.

Makary found that wound closure had the highest median markup ratio at 7.0, and interpreting head CT scans had the greatest within-hospital variation, with markup ratios ranging between 1.6 and 27.

For a physician interpretation of an electrocardiogram, the median Medicare allowable rate is $16, but different emergency departments charged anywhere from $18 to $317, with a median charge of $95 (or a markup ratio of 6.0). General internal medicine doctors in hospitals charged an average of $62 for the same service.

Overall, emergency departments that charged patients the most were more likely to be located in for-profit hospitals in the southeastern and Midwestern U.S., and served higher populations of uninsured, African-American and Hispanic patients.

Our study found that inequality is then further compounded on poor, minority groups, who are more likely to receive services from hospitals that charge the most,” says Makary.

While the study was limited by lack of data on facility and technical fees also charged by the hospital, as well as lack of patients’ insurance type and the actual amount patients ultimately paid, Makary says the study highlights the urgent need for legislation that will protect uninsured patients.

“This is a health care systems problem that requires state and federal legislation to protect patients. New York has passed a law that requires hospital and insurance companies to agree on a cost for the care so patients are not billed egregious amounts. Patients really have no way of protecting themselves from these pricing practices,” says Tim Xu, a fourth year medical student at the Johns Hopkins University School of Medicine and the paper’s first author.

Models such as the Maryland Waiver, Makary adds, where prices are set at the same rate no matter what hospital a patient goes to, can increase price transparency and protect patients. Currently, at least 7 states have passed some legislation to protect uninsured patients from paying so called charge master prices, a list of billable services developed and closely guarded by each hospital, noting prices that are usually highly inflated and charged mainly to uninsured and other “self pay” patients. However, Makary says a national model is necessary to unveil what is currently an inexplicably chaotic and opaque pricing system.

Article: Variation in Emergency Department vs Internal Medicine Excess Charges in the United States, Martin A. Makary, MD, MPH et al., JAMA Internal Medicine, doi: 10.1001/jamainternmed.2017.1598, published online 30 May 2017.

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This entry was posted on June 1, 2017, in Main.

More than 8 million children could face higher insurance costs without CHIP

More than 8 million children enrolled in the Children’s Health Insurance Program (CHIP) could be at risk of losing coverage if federal funding for the program is not extended this year. Children with chronic conditions are most vulnerable, and their families could face substantial cost increases if they lose CHIP coverage and need to shift their insurance to a Marketplace plan, according to a Yale study.

The findings were published in the April issue of Health Affairs.

CHIP is a main source of government-sponsored health insurance for children in low-income families. A quarter of those children – 2 million – have chronic conditions, such as diabetes or asthma, that require more care at greater cost. To determine the impacts on those children if Congress fails to extend CHIP later this year, a team of Yale researchers compared CHIP coverage with Marketplace plans nationwide. The Marketplace, developed as part of the Affordable Care Act, is an online exchange that allows families to shop for health insurance plans, often with support of government subsidies.

To conduct their analysis, the research team used data from CHIP and Marketplace plans, as well as utilization data on children with chronic conditions. They calculated out-of-pocket costs for children enrolled in either plan in every state. Finally, they analyzed costs for children at four different income levels.

While the researchers found that both CHIP and Marketplace plans are effective in providing coverage for children with chronic conditions, they concluded that CHIP is the preferable alternative. “CHIP plans provide better and more generous coverage,” said first author Alon Peltz. “The amount that families may need to pay if CHIP goes away and children need to enroll in a Marketplace plan could be quite significant.”

If low-income families shift from CHIP to Marketplace plans, their annual out-of-pocket expenses could rise significantly, as much as $233 to $2,472, depending on income level and the child’s health care needs. Families with children who have epilepsy, diabetes, or a mood disorder could face the steepest costs increases, the researchers said.

“As policymakers consider alternatives for providing coverage for this vulnerable population of children, we encourage them to be particularly mindful of the cost burden families might encounter,” Peltz noted.

While CHIP, established in 1997, was reauthorized through 2019, funding expires in September 2017. Loss of federal funding could force states to cut benefits or even discontinue their programs altogether.

In the event that CHIP is not funded, and families switch to Marketplace plans, the researchers suggested ways the latter plans could be made more affordable. Modifications include enhancements to current cost-sharing protections; a review of co-payments for prescription drugs and hospitalizations that drive out-of-pocket costs; and close monitoring of deductibles.

“We found that minor modifications in the way marketplace subsidies are structured could put them in line with the CHIP program,” Peltz said. “However, given the uncertain future of the Affordable Care Act, extending funding for CHIP is likely the best strategy for providing stability and security for those families who need it most.”

Other Yale authors are Amy J. Davidoff, Cary P. Gross, and Marjorie S. Rosenthal.

The authors received funding from the Robert Wood Johnson Foundation to support this research.

Article: Low-Income Children With Chronic Conditions Face Increased Costs If Shifted From CHIP To Marketplace Plans, Alon Peltz, Amy J. Davidoff, Cary P. Gross and Marjorie S. Rosenthal, Health Affairs, doi: 10.1377/hlthaff.2016.1280, published April 2017.

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This entry was posted on April 5, 2017, in Main.

Time for physicians to prepare for impending appropriate use mandate

Within a year, the Centers for Medicare & Medicaid Services (CMS) will implement a provision in the Protecting Access to Medicare Act (PAMA) that requires physicians to consult appropriate use criteria (AUC) using CMS-approved computer-based clinical decision support mechanisms when ordering advanced imaging procedures. Under PAMA, providers will have to submit proof that applicable AUC were consulted to have their claims processed. After the CMS collects 2 years of data, “outlier” physicians will subject to prior authorization, thus possibly limiting patients’ and physicians’ access to advanced imaging procedures. Because coronary artery disease evaluation is a priority clinical area, most cardiac imaging procedures will be subject to the initial rollout of the mandate.

Once PAMA is implemented, the burden of reducing inappropriate use will move largely from payers to providers. In preparation for this shift, physicians will need to be educated about expectations under PAMA, which should include increasing their understanding of appropriate use. This will require close collaboration between professional societies representing referring providers and imaging specialists and involvement of all stakeholders.

Article: Promoting Appropriate Use of Cardiac Imaging: No Longer an Academic Exercise, Rami Doukky, MD, MSc; Gretchen Diemer, MD; Andria Medina, MD, PhD; David E. Winchester, MD, MS; Venkatesh L. Murthy, MD, PhD; Lawrence M. Phillips, MD; Kathleen Flood, BS; Linda Giering, PhD; Georgia Hearn, JD; Ronald G. Schwartz, MD, MS; Raymond Russell, MD, PhD; David Wolinsky, MD, Annals of Internal Medicine, published 28 February 2017.

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This entry was posted on March 1, 2017, in Main.

Trump's policies set to damage health and science, warns The BMJ

The BMJ warns that Trump’s administration “is acting in ways that will suppress research and limit communication on scientific topics that it deems politically inconvenient.”

Early policies “risk head-on collision with the scientific and health communities” say editors Jose Merino, Elizabeth Loder and Kamran Abbasi, and Harvard professor of health policy, Ashish Jha. “Trump’s policies in other areas also have the potential to damage health,” they add.

For example, they point to communications restrictions on several environmental protection and public health agencies, while scientific information on government websites “is being removed and becoming inaccessible.”

And they warn that proposals to reform the Food and Drug Administration “will scale back the agency’s ability to ensure the safety and efficacy of approved drugs, harming not only people in America but those in other countries that often follow the FDA’s lead.”

Instant repeal of the Affordable Care Act, without a viable alternative, will surely prove damaging, they write. While Trump’s immigration policy “will disrupt the flow of scientific ideas and knowledge, hinder recruitment of scientists to American institutions, limit training opportunities for international physicians, and worsen national shortages of healthcare workers.”

Of course, Trump isn’t the first politician to flout scientific principles or favour “alternative facts,” but this situation seems different and more worrisome, they say.

They point out that the United States is a powerful nation with a profound influence on the health of the world’s population. “That power and influence, if misdirected, will damage efforts to create a healthier, stronger world, one that supports women’s health, condemns torture and other human rights abuses, treats refugees and migrants with dignity and hospitality, and ensures that all people, especially the most vulnerable, have access to high quality healthcare.”

The BMJ’s solution is to “reaffirm our commitment to fostering and applying the best evidence for policy and practice, to be an open forum for rigorous debate that challenges the status quo and holds us all to account, to speak truth to power and support others who do the same, and to actively campaign for a better world, based on our values of transparency, independence, and scientific and journalistic integrity,” they explain.

“Whichever way Trump turns, the scientific and healthcare communities must commit to serving the best interests of patients and the public,” they say. “By arming ourselves with the fruits of science, being guided by facts and evidence, we can create a healthier planet, not just for Americans but for all the peoples of our world.”

Editorial: Standing up for science in the era of Trump, Jose G Merino, Ashish Jha KT Li, Elizabeth Loder and Kamran Abbasi, The BMJ, doi: 10.1136/bmj.j775 , published 21 February 2017.

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This entry was posted on February 22, 2017, in Main.

Many cancer survivors change their prescription drug use for financial reasons

A new analysis indicates that many cancer survivors change their prescription drug use (including skipping doses or requesting cheaper medications) for financial reasons. Published early online in CANCER, a peer-reviewed journal of the American Cancer Society, the study provides important information on the financial burden experienced by cancer survivors, suggesting non-elderly cancer survivors are particularly vulnerable to this phenomenon.

Although research has shown that cancer drugs can represent considerable costs for cancer patients and their families, there is limited information about changes in prescription drug use for financial reasons among cancer survivors. To further investigate this, researchers from the American Cancer Society, the Centers for Disease Control and Prevention (CDC), and the National Institutes of Health used 2011-2014 data from the National Health Interview Survey, an annual household interview survey conducted by the CDC. This nationally representative survey included 8931 cancer survivors and 126,287 individuals without a cancer history.

Among non-elderly adults, 31.6 percent of those who had been recently diagnosed and 27.9 percent of those who had been previously diagnosed (at least two years earlier) reported a change in prescription drug use for financial reasons, compared with 21.4 percent of adults without a history of cancer. “Specifically, non-elderly cancer survivors were more likely to skip medication, delay filling a prescription, ask their doctor for lower-cost medication, and use alternative therapies for financial reasons compared with non-elderly individuals without a cancer history,” said the American Cancer Society’s Ahmedin Jemal, DVM, PhD, a senior author of the paper. The study also showed that among privately insured non-elderly cancer survivors, one-third of survivors enrolled in high-deductible plans asked their doctor for lower-cost medications compared with less than one-fifth of survivors enrolled in low-deductible plans.

Changes in prescription drug use for financial reasons were generally similar between elderly cancer survivors and elderly individuals without a cancer history. This is likely because of uniform healthcare coverage through Medicare.

The findings may have significant policy implications. “Healthcare reforms addressing the financial burden of cancer among survivors, including the escalating cost of prescription drugs, should consider multiple comorbid conditions and high-deductible health plans, and the working poor,” said Dr. Jemal. “Our findings also have implications for doctor and patient communication about the financial burden of cancer when making treatment decisions, especially on the use of certain drugs that cost hundreds of thousands of dollars but with very small benefit compared with alternative and more affordable drugs.”

In an accompanying editorial addressing the financial toxicity of cancer, Daniel Goldstein, MD, of the Rabin Medical Center in Israel and Emory University, stressed the need to avoid unnecessary testing and treatments. He added that “when two different treatments exist with equivalent efficacy and safety, the cheaper treatment should always be chosen.”

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This entry was posted on February 21, 2017, in Main.