Reference payment initiative for colonoscopy saves $7 million

A reference payment initiative can lead to increased savings and lowered prices, at least in the case of colonoscopies in the Golden State, according to a recent study published in JAMA Internal Medicine.

The Affordable Care Act put certain limits on cost sharing, which has made hospitals and other facilities less likely to keep their prices reasonably low. This led to varied pricing for some procedures, even within the same community.  

Some providers are now implementing reference payment initiatives as a potential answer to this trend. In 2012, the California Public Employees’ Retirement System (CalPERS) implemented reference payment for colonoscopy, announcing it would pay the full negotiated price if patients chose to have their treatment at an a freestanding ambulatory surgery center (ASC), but would limit payment to $1,500 if patients chose a hospital-based outpatient department (HOPD).

James C. Robinson, PhD, of the University of California-Berkeley School of Public Health, and colleagues studied the impact of this initiative by tracking data from over 35,000 CalPERS enrollees. This included more than 21,000 enrollees who underwent colonoscopy in the three years before implementation and more than 13,000 enrollees who underwent colonoscopy in the two years after implementation.

Data from a control group of Anthem Blue Cross enrollees was also studied, so the authors could make easy comparisons while tracking the initiative’s impact.

Overall, the statistics showed that the CalPERS reference payment initiative resulted in savings of $7 million, or 28 percent. Other benefits were discovered as well.

For example, ASC utilization was 68.6 percent in 2009. In 2013, after the reference payment initiative was put into place, it was 90.5 percent.

In addition, the mean price paid for colonoscopy for CalPERS enrollees was $1,587 in 2009 and $1,716 in 2011, but that number dropped back down to $1,508 in 2013. For the control group of Anthem enrollees, the mean price continued to rise instead of falling from 2011 to 2013.

Also, there was no observed reduction in patient safety as a result of the initiative.

“Rates of complications were consistently lower for CalPERS than for Anthem enrollees, but the differences are small and not statistically significant,” the authors wrote. “There were no meaningful differences or trends in the rates of the three subgroups of complications, including serious gastrointestinal, other gastrointestinal, and cardiovascular.”

An accompanying commentary published in JAMA Internal Medicine argued that cost savings are not the only angle to this story. In the commentary, David Lieberman, MD, of Oregon Health and Science University, and John Allen, MD, of the Yale University School of Medicine, warned that “meaningful quality benchmarks” should be present in any study about reference payment initiatives.

“Patients selecting lower-cost centers require assurances that they are receiving high-quality care,” Lieberman and Allen wrote.