Cash cost for imaging often lower than payer-negotiated price, with widespread variation across hospitals
The cash price for imaging services is often lower than what commercially insured patients pay, with widespread variation across providers, according to research published Tuesday in JAMA Network Open.
It was back in January that the federal government started requiring hospitals to publicly disclose charges for 70 “shoppable” healthcare services, including 13 in radiology. Recent analyses have found that many are failing this price transparency check, with rates tallying six times higher than Medicare.
Experts from Johns Hopkins recently set out to explore cash pricing, which impacts America’s 26 million uninsured and one-third of workers enrolled in high-deductible health plans. They found only 922 hospitals disclosed both their cash and commercial negotiated prices as of July 1. There was also a negative correlation between median cash price and number of hospitals disclosing the cost for such services
“More expensive services were less likely to be disclosed, which might suggest strategic disclosing decisions,” corresponding author Ge Bai, PhD, a certified public accountant, Carey Business School professor, and expert in healthcare pricing, and colleagues wrote Dec. 21. “To the extent that more hospitals will disclose prices to comply with the Hospital Price Transparency Final Rule, the cross-hospital variation of cash prices will likely increase,” they added later.
Researchers obtained their data from Turquoise Health, a tech firm specializing in collecting hospital pricing info. Altogether, the company has reviewed 5,359 hospitals, with more than 900 across 49 states disclosing both cash and commercial-negotiated rates. Among radiology services, the proportion of hospitals setting cash prices below median commercial rates ranged from 39% for CT of the abdomen and pelvis up to 44.3% for lower-back X-rays. Only about 0.6% to 4.3% of hospitals set out-of-pocket charges equal to their lowest negotiated amount on the commercial side.
MRI of the brain was the priciest imaging service, with a median cash cost of $2,306 and interquartile range of $1,394 to $3,517. CT of the abdomen and pelvis with contrast came in second at $2,268 (IQR of $1,278 to $3,534), followed by MRI of the lower spinal canal at $1,625 ($968 to $2,431). Across radiology services, the cash price was less than all commercial rates in between 7.9% to 15.2% of hospitals in the analysis.
“In summary, cash prices determined unilaterally by hospitals are often lower than commercial prices negotiated between hospitals and insurers,” the authors concluded. “Uninsured and underinsured patients who choose to take the cash price offered by hospitals might benefit financially.”
Read the rest of the research letter in JAMA here.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.