Shift toward hospital-based CV testing increased patient costs
A government effort to shift noninvasive cardiac testing (NCT) from provider-based settings to hospital-based settings more than a decade ago inadvertently increased healthcare costs in the long run, researchers reported in JAMA Internal Medicine Oct. 14.
CMS first began reducing payments in the provider-based office (PBO) setting in 2005, citing concerns that NCTs like stress tests and echocardiography were being unnecessarily overused in PBOs. The move was motivated by a 57.1% increase between 1999 and 2005 in the use of NCTs in the U.S., driven almost exclusively by the use of such tests in outpatient clinician settings.
Starting in 2005, CMS slashed payments in PBO settings by half, cutting reimbursements from $600 to $300 per test on average. But reimbursement rates for hospital-based outpatient (HBO) settings remained roughly the same, effectively making it more lucrative to perform the same NCTs in an HBO setting.
In their study, Frederick A. Masoudi, MD, MSPH, of the University of Colorado Anschutz Medical Campus, and co-authors explored trends in Medicare payment rates for outpatient NCTs, comparing data between PBO and HBO settings. The observational claims-based study involved a 5% random sample of Medicare fee-for-service (FFS) claims between 1999 and 2015 and Medicare Advantage claims from three large health maintenance organizations between 2005 and 2015.
Data ultimately included an average of 1.72 million patient-years annually in Medicare FFS beneficiaries and 142,230 patient-years annually in the managed care control group.
Masoudi et al. reported the Medicare payment ratio of FFS hospital-based outpatient testing to PBO testing increased from 1.05 in 2005 to 2.32 in 2015. The proportion of FFS hospital-based outpatient testing increased from 2.11% in 2008 to 43.2% in 2015, correlating with the payment ratio, but the proportion of HBO testing in the control group declined, from 16.6% in 2008 to 15.2% in 2015.
The estimated extra costs from tests moving from PBO to HBO settings in the Medicare FFS group totaled $661 million in 2015, the authors said. That included $161 million in patient out-of-pocket costs.
“The findings of this study are concerning and hold important lessons for policymakers,” Jose F. Figueroa, MD, MPH, and Karen E. Joynt Maddox, MD, MPH, wrote in a linked editorial, emphasizing the team’s finding that the proportion of HBO tests actually declined among the control population over time. “Although the reimbursement change had its intended effect, which was to slow (and in fact reverse) the growth in the use of NCTs seen in the early 2000s, the policy also contributed to...major unintended consequences.”
One of those consequences was that total costs related to NCTs actually increased over time, contrary to CMS’ intentions. It’s also notable that patient out-of-pocket costs rose over time, since HBO tests are more expensive than PBO tests.
Figueroa and Joynt Maddox said payment discrepancies between HBO and PBO settings are likely driving greater consolidation of the healthcare market, citing a recent study that found vertical consolidation increased physicians’ prices by as much as 14.1% with no change in case mix.
“There are potential unintended consequences to every policy action,” the editorialists wrote. “The lowering of payment in PBO settings for cardiovascular tests actually led to increased total costs, including higher costs paid by patients, and likely encouraged consolidation among providers for monetary gain. By enacting site-neutral payments, requiring transparency of healthcare prices and continuing to incentivize value-based care models, policymakers can ensure that patients are receiving the right care without needlessly paying more for it.”
After graduating from Indiana University-Bloomington with a bachelor’s in journalism, Anicka joined TriMed’s Chicago team in 2017 covering cardiology. Close to her heart is long-form journalism, Pilot G-2 pens, dark chocolate and her dog Harper Lee.