A 'lucrative corner' of the healthcare market

Hospital outpatient departments are "lucrative corners" of the healthcare market that are raising the cost of outpatient procedures and frustrating patients, Daniell Ofri, MD, PhD, a primary care physician at New York City-based Bellevue Hospital, wrote in an opinion piece posted on The New York Times.

Dr. Ofri took her daughter to urgent care for a sprain. The clinic performed two X-rays and issued a bill for $1,168. Dr. Ofri discovered she was charged for hospital-based X-rays because the center was hospital-affiliated and could charge the accordingly higher prices.

Hospital outpatient departments, which perform the same outpatient procedures as physicians' offices and clinics, are considered part of a hospital. One study found that HOPDs charge an average of $1,383 for a colonoscopy, compared to the average of $625 at physicians' offices. Chemotherapy can cost twice as much and echocardiograms three times as much at HOPDs as in other settings. This makes HOPDs an attractive business plan for hospitals that aggressively acquire physicians' practices.

"Since these facilities don't necessarily look like hospitals, patients can be easily deceived and end up with hefty financial surprises," Dr. Ofri wrote. "I'm a doctor who works in a hospital every day, and I was fooled."

Federal law protects patients from surprise bills if they are unknowingly treated by out-of-network physicians, but there is no protection for hospital-affiliated clinics. 

"Federal regulations are needed, at the very least, to require facilities to be upfront with their pricing scheme — and more ideally, to eliminate this price differential entirely," she wrote.

A movement is calling for site-neutral payments, meaning Medicare would pay physicians the same price for an outpatient procedure no matter the setting. So far, hospital industry lobbies have kept the movement at bay.

"It's time for Congress to protect patients from both unfair pricing schemes and health care deception," Dr. Ofri wrote. "MedPAC, the nonpartisan Medicare Payment Advisory Commission, recently recommended to Congress a basic set of site-neutral policies. It would apply site-neutral payments to a handful of low-risk procedures — some imaging, medication injections, simple office procedures — and this would apply to all HOPDs."

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