The markup for emergency physician care, or the amount charged over what Medicare allows, is twice that of the markup for care by internists, a nationwide analysis of Medicare billing records shows. The findings were published online May 30 in JAMA Internal Medicine.
Tim Xu, MD, MPP, from the Department of Surgery, Johns Hopkins School of Medicine, Baltimore, Maryland, and colleagues analyzed Centers for Medicare & Medicaid Services (CMS) claims from 12,337 emergency medicine physicians at 2707 hospitals and 57,607 internal medicine physicians at 3669 hospitals in all 50 states. They looked at all services provided to Medicare Part B fee-for-service beneficiaries in 2013.
The overall markup ratio for services provided by emergency medicine physicians was 4.4 times the rate Medicare pays (resulting in 340% excess charges). The markup ratio was 2.1 (110% excess charges) for all services performed by internal medicine physicians. For reference, a markup ratio of 3 means if Medicare charges $100 for the service, the hospital charges $300.
Among common emergency department (ED) procedures, the one with the highest median markup ratio was laceration repair at, 7 times (range, 2.0 – 15.0) what Medicare allows. The fee for physician reading of electrocardiograms ranged from the $16 allowed by Medicare to a markup of 1.1 (total of $18) in some EDs and as much as $317 in EDs with a markup ratio of 20 for the service.
The markup ratio also varied by hospital. In 2013, different EDs charged between 1.0 and 12.6 times what Medicare paid for the services. That range was between 1.0 and 14.1 for internal medicine services in the hospitals studied.
“In 2012, the 50 hospitals in the United States with the highest markups charged patients at least 9.2 times what the Medicare program would pay for care,” the authors write.
The wide swings in charges hit the uninsured and out-of-network patients especially hard because they may be liable for the full charges, whereas the insured will likely receive discounts.
Understanding markups is particularly important because the uninsured and out-of-network may be among those most likely to seek care in the ED, the authors write. The urgent nature of ED care also leaves little opportunity to comparison shop, they note.
Researchers also found that often the ED markups were significantly higher than those claimed by internal medicine for the same services.
“For example, the median hospital charged an additional $34 for interpreting an electrocardiogram when performed by an emergency medicine physician ($96; markup ratio, 6.0) relative to an internal medicine physician ($62; markup ratio, 3.9),” the authors explain.
Higher ED markup ratios were linked to hospitals that had for-profit ownership and those that had a greater percentage of uninsured patients, those that had at least 20% African-American or Hispanic populations, and those located in the Southeast. There were no such associations for internal medicine claims among hospitals.
At this time, there is no national legislation that addresses surprise charges for patients, the authors point out.
The authors list three approaches that have been proposed to protect patients: making prices transparent, although they note that comparing prices works better outside acute care situations; capping charges at 125% of the Medicare-allowable amount; and requiring hospitals to bundle ED care with all professional and facility fees and “therefore maintain a pool of employees and contracted physicians who agree to accept reasonable payment rates a priori.”
Dr Xu was supported by an Alpha Omega Alpha Carolyn L. Kuckein Student Research Fellowship. Mr and Mrs John Rodda and The Rodda Family Partnership, Ltd provided support for this research. The researchers have disclosed no other relevant financial relationships.
JAMA Intern Med. Published online May 30, 2017. Abstract
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