A new study published by researchers at Brown University in Providence, R.I., found that commercial insurance payments for common ophthalmology procedures vary widely across the U.S., Medscape reported July 8.
The study analyzed data from Blue Cross Blue Shield, UnitedHealthcare, Cigna and Aetna, highlighting the variability of facility fees, professional fees and other inconsistencies in the price of eye care.
Here are 10 takeaways from the study:
1. The study looked at more than 740,000 price points for 10 high-volume ophthalmology procedures, including intravitreal injections, iris revision surgery, treatment for severe retinopathy and laser surgery for post-cataract treatment. The researchers found that the facility fees paid by insurance companies was often greater than professional charges by factors of two to four.
2. “Facility prices are negotiated by hospitals, health-system outpatient departments and large ambulatory surgery centers that wield substantially more market clout than individual ophthalmologists,” Alexander Philips,one of the researchers, told Medscape. “Those institutions fold a wide range of fixed costs — real estate, equipment, around-the-clock staffing and community-benefit obligations — into their rates, so the starting point for negotiation differs dramatically from one organization to the next.”
3. Median facility prices for standard cataract surgery, for example, ranged from $1,521 with Cigna, to $4,274 with Aetna, representing a $2,753 gap. Professional fees, on the other hand, showed a much narrower spread, from $581 to $1,020, respectively.
4. “What a physician can charge is anchored to well-known relative-value schedules that leave less room for maneuver,” Mr. Philips said. “The moment a hospital acquires a previously independent office, the exact same cataract extraction can suddenly carry a separate facility component, widening the gap even further.”
5. This may also result in “unpredictable” out-of-pocket expenses for some patients, the researchers added, while also making it more difficult for independent physicians to compete in the market.
6. BCBS paid an average 14% higher for professional fees and 13% higher for facility fees, compared to the other payers. Aetna showed the most severe divergence, with professional fees 54% below average and facility fees 45% above average.
7. “Aetna appears to drive a hard bargain with individual physicians, who usually have limited leverage, while conceding more to large hospital systems that control valuable operating rooms and imaging equipment,” Mr. Philips told Medscape. “That strategy allows the plan to advertise a lean physician fee schedule to employers, keeping the most visible line item in check, yet still maintain broad hospital networks by paying the premiums those systems demand on the facility side.”
8. The study’s geographic analysis found that the prices for cataract surgery could have a fivefold difference among states. Connecticut and Alaska were outliers with significantly higher prices, likely due to academic centers or Medicare payments, Medscape reported.
9. The researchers also suggested that market dynamics, like insurer-provider negotiations, selective contracting and vertical integration also shape these price disparities. For example, UnitedHealthcare’s lower facility fees are likely a reflection of its ownership of care delivery assets through Optum.
10. In an invited commentary piece, Sean Kerowitz, MD, of the department of ophthalmology at Vanderbilt University in Nashville, Tenn., and coauthors from Cleveland Clinic, said that ophthalmology is “uniquely positioned” to benefit from increased transparency reforms due to its high volume of standardized procedures. However, the data may not capture all of the nuances of care delivery within the specialty.
“Site of service may impact findings,” they wrote. “The proportion of hospital or ambulatory surgical centers in each network or geographic area may explain the larger variation in facility fees.”
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