States with no fee schedules see higher hospital outpatient payments per episode, study finds

Hospitals in states with percent-of-charge-based fee regulations or no fee schedules saw higher and faster growing outpatient payments than states with fixed-amount fee schedules in 2015, an annual study from the Workers Compensation Research Institute found.

The study, "Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 6th Edition," compares hospital payments for common workers' compensation outpatient surgeries across 35 states. Researchers analyzed trends within each state from 2005 to 2015, and included payments for services provided and billed by hospitals. The study excludes payments for services billed by nonhospital medical providers and ambulatory surgery centers.

Study authors found hospital outpatient payments were between 37 percent to 151 percent higher per surgical episode in states with percent-of-charge-based fee regulations compared to the median of payments in states with fixed-amount fee schedules. In addition, states without fee schedules saw hospital outpatient payments per episode 44 percent to 136 percent higher than the median of states with fixed-amount fee schedules.

The WCRI study also found per episode, hospital outpatient payments in states with percent-of-change-based fee regulations or no fee schedules increased quicker than in states with fixed-amount fee schedules.

Ramona Tanabe, WCRI's executive vice president and in-house counsel, said the study "will help policymakers and stakeholders conduct more meaningful comparisons of hospital payments across states, as well as to monitor the hospital payment trends in relation to reforms of hospital outpatient fee regulations." 

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