The average facility fee for ASCs is significantly lower than for hospitals across a variety of common outpatient procedures, which carries implications for policies such as certificate-of-need laws.
That’s according to a recent study published in The American Journal of Managed Care which found that hospitals, on average, charge facility fees more than twice as high as those negotiated by ASCs for the same procedures.
Hospital fees exceeded ASC fees by $3,077 on average, with mean hospital markups versus ASCs varying between 101% and 167% depending on the procedure, researchers found. For example, hospital fees for knee arthroplasty were $5,717 higher than those at ASCs, and arthrocentesis was priced at $1,515 more at hospitals.
The study analyzed insurance plan-specific facility fees for the 10 most common procedures performed at ASCs, covering fields such as gastroenterology, ophthalmology, orthopedics and urology. Using data from the Transparency in Coverage Act, which mandates price disclosures from private insurers, the researchers reviewed fees disclosed by major insurers including Anthem, Aetna, Cigna and UnitedHealthcare, across all 50 states.
“Given substantial fee differences between ASCs and hospitals, states with certificate-of-need laws should reconsider whether further ASC expansion could reduce spending growth or increase access to care,” researchers wrote. “Such reforms should include safeguards against financial conflicts of interest among owners and prioritize expansion targeting underserved patient populations.”
Hospitals’ higher fees may be due to greater care delivery costs, as they treat sicker patients and maintain emergency surgery capacity, which incurs additional expenses, researchers wrote. Hospitals may also leverage greater market power to set higher fees, while ASCs often charge less to attract more patients.
Currently, there is legislation underway to standardize Medicare payments across different care settings. U.S. Sens. Bill Cassidy, M.D. (R-La.) and Maggie Hassan (D-N.H.) argue that their proposed framework – which calls for site-neutral payment reform – could create a more balanced landscape between hospitals and independent care providers by aligning Medicare payments across various care settings.
“As a doctor, my focus is always providing the best care at the most affordable cost,” Cassidy said in a press release. “If the same care can be safely provided in different settings, patients should not pay hundreds more simply because their doctor works in a hospital. Our framework provides a path to ensure that.”
