Lower office-based charges are not discouraging patients from seeking the same treatments in hospitals, where costs may be higher.
In recent years, Medicare has reduced hospital payments for imaging procedures and some other services. As a result, the differences between payments for certain clinical services performed in hospitals versus office-based settings, which historically have been paid at lower levels, are not as great as they used to be.
Employers and commercial plans also have sought to contain costs by negotiating more equal payments across sites of service and by encouraging enrollees to obtain services at lower-priced sites of care. However, a recent analysis of commercial claims paid between 2013 and 2016 for diagnostic endoscopy and major imaging procedures in hospital and non-hospital service sites shows no convergence in payment amounts across settings.
Office endoscopy payments average 36 percent of the hospital rate, while endoscopies done in ambulatory surgery centers have total physician plus facility payments of approximately 70 percent of the hospital rate. Office magnetic resonance imaging payment rates are 41 percent of hospital rates, and computerized tomography scans cost one-third of the hospital rate. This is consistent across imaging procedure types.
Procedure share by site has been remarkably consistent. Consumer-directed health plans and health plan incentives have not diverted patients from hospitals to sites with lower expenses. If anything, there has been a small decrease in the office-based service share. Taken together, these results suggest site-neutral payments for high-volume diagnostic services in ambulatory settings have not yet materialized in the commercial market, and hospitals have maintained their procedure share.