Category Archives: Outpatient

Hospital Outpatient Payments Rising — Again

The Workers’ Compensation Research Institute (WCRI) released a study today that indicated that hospital outpatient payments were higher and growing faster in states with percent-of-charge-based fee regulations or no fee schedules.

This study is an annual study that compares hospital payments for a group of common outpatient surgeries in workers’ compensation across 35 states from 2005 to 2016.

According to WCRI’s executive vice president and counsel, Ramona Tanabe, “Rising hospital costs continue to be a focus for public policymakers and system stakeholders in many states.”

The study found that states with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules.

Percent-of-charge-based states were 30 — 196% higher than median of the states with fixed-amount fee schedules in 2016.

States without fee schedules also had higher payments per episode; 38 — 143% higher than the median of fixed-amount states in 2016.

Lastly, WCRI found that hospital payments per episode in most states with percent-of charge-based fee regulations or no fee schedules, grew faster than states with fixed-amount fee schedules.

The study also compared payments for workers’ comp with Medicare rates for the most common group of surgical procedures across states. The following chart highlights the variation in the difference between average workers’ comp payments and Medicare rates. The variation was as low as 38%, or $2,012 below Medicare in Nevada, and as high as 502%, or $21,692 above Medicare in Alabama.

Source: WCRI

So, what does this mean?

It means that hospital outpatient payments for the most common group of surgical procedures in Workers’ Comp are not decreasing, and are likely adding to the slow, but steady rise in the overall total average medical cost for lost-time claims, a development I have followed for some time now with the release of NCCI’s State of the Line Reports.

This is not the first time I have discussed this topic, and probably won’t be the last, as I keep reminding you that surgical costs for most common workers’ comp surgeries are a fraction of the cost here in the US in countries that provide medical travel services.

If this study is right, wouldn’t you rather pay for a surgical procedure in Costa Rica, for example, that costs $12—$13,000, than paying $21,692 in Alabama? Eighteen out of thirty-five states listed on the above chart have higher payments than the median of 100. This represents 51.4% of all the states examined in the study. Just more than half.

And this idea of medical travel is stupid, ridiculous, and a non-starter? Ok, keep shelling out more money for hospital outpatient procedures. After all, it ain’t your money, is it?

To download this study, visit WCRI’s website at https://www.wcrinet.org/reports/hospital-outpatient-payment-index-interstate-variations-and-policy-analysis-7th-edition.

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CMS Greenlights Outpatient Total Knee Replacement: What it Could Mean for Medical Travel

According to an article in MedCityNews.com, the Center for Medicare and Medicaid Services (CMS) removed total knee arthroplasty (TKA) from the Inpatient-only list in November.

This will effectively allow eligible Medicare patients to have the surgery in outpatient departments of local hospitals beginning this month.

The article also mentioned that CMS did not add TKA’s to its list of payable procedures at ambulatory surgical centers (ASCs).

This will give hospitals an important head start on a growing outpatient competitor lobbying hard for the agency’s blessing, the article stated.

CMS will continue to review ASCs safety and feasibility of total joint replacement, which is a signal that change is coming. If it does so, it will pose a threat to hospital revenue.

What this may mean for medical travel is that if the cost savings are significant from allowing outpatient, and eventually ASC total knee replacement, then outbound medical travel facilities catering to such clients will see a drop in patients choosing to go abroad for such surgeries.

To that end, the industry must monitor CMS’ position on ASCs and knee replacement, as well as determine if domestic hospitals are drawing away customers because the procedure can be done on an outpatient basis.