In a recent trend, hospitals have been hiring physicians to work under the hospital’s umbrella, healthcare attorneys in Fort Lauderdale report. While many – including hospital administrators – have touted this partnership as “aligning” practices and healthcare goals, a new study published by the National Institute for Health Care Reform (NIHCR) suggests that there may be a more financially-focused goal in place.
According to the NIHCR’s study, this trend, known as practice acquisition, is spiking the costs for outpatient procedures such as common diagnostic imaging, colonoscopies, and routine lab work tests. Practice acquisition sometimes costs patients two to three times more than they would pay to have these procedures done in a physician’s office, or in an ambulatory surgery center or free-standing lab. The study highlighted the change in price for a standard colonoscopy as an outpatient procedure in the hospital versus a visit to the doctor’s office. As an outpatient procedure, a colonoscopy costs, on average, $1,380, but as part of a doctor’s visit, the average cost is $625.
In another comparison study, study authors James Reschovsky, Ph.D., and Chapin White, Ph.D., from the NIHCR, looked at procedure costs in Indianapolis, Ind. Here, a knee MRI costs about $560 in a community doctor’s office or off-site imaging center. But in the hospital, the same procedure costs $1,540. The two researchers uncovered these markups during analysis of insurance claims in 2011 for 590,000 non-elderly retired autoworkers in 18 cities across the country.
Typically, healthcare attorneys in Fort Lauderdale see private health plans, including Medicare, paying more for procedures that are done on an outpatient basis, presumably because hospitals have higher overhead costs to work with than private offices, and have to cover the sometimes free care provided in the hospital’s emergency room. In order to cover some of these cost increases, hospitals have been buying medical practices, and billing patients for the practices’ services according to the higher rates for outpatient procedures. A patient can be billed the higher rate even if the physician he sees is not on the hospital’s grounds. A Milliman study into this practice acquisition shows that the costs for chemotherapy have been raised by as much as 53 percent in some cases. In their study, Reschovsky and White claim that the payment disparity is the probable cause that has “accelerated the trend of hospital acquisition of physician practices.”
In March, the Medicare Payment Advisory Committee (MedPAC) recommended that Medicare cut the outpatient rates for diagnostic imaging and tests, along with many other procedures, to keep prices in line with those of physician’s offices. MedPAC stated that Medicare should use the “cost of the most efficient setting” as their model for determining costs, as long as they are not compromising quality and safety for the patient. Both MedPAC and the NIHCR study see this area of payment differential as a chance for hospital administrations to cut healthcare spending. Also, healthcare insurance providers could help patients find a lower-cost option for certain outpatient procedures that can also be performed in a doctor’s office or community care center.
At Lubell Rosen, a Florida law firm specializing in healthcare law and medical malpractice defense, our attorneys represent doctors, hospitals, and healthcare professionals who are facing legal action. To discuss your case, or other healthcare laws and concerns throughout Florida, Georgia, New Jersey or New York, contact a Lubell Rosen attorney today.