Variation in Emergency Department vs Internal Medicine Excess Charges in the United States | Emergency Medicine | JAMA Internal Medicine | JAMA Network
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Original Investigation
August 2017

Variation in Emergency Department vs Internal Medicine Excess Charges in the United States

Author Affiliations
  • 1Department of Surgery, Johns Hopkins School of Medicine, Baltimore, Maryland
  • 2Carey Business School, The Johns Hopkins University, Baltimore, Maryland
  • 3Department of Medicine, Johns Hopkins School of Medicine, Baltimore, Maryland
  • 4Department of Epidemiology, Johns Hopkins School of Public Health, Baltimore, Maryland
  • 5Department of Health Policy Management, Johns Hopkins School of Public Health, Baltimore, Maryland
JAMA Intern Med. 2017;177(8):1139-1145. doi:10.1001/jamainternmed.2017.1598
Key Points

Question  How do emergency departments set chargemaster prices for services, and how do these practices affect patients?

Findings  In this analysis of Medicare billing records from 2707 US hospitals in 2013, different emergency departments charged between 1.0 and 12.6 times what Medicare paid for the services. Excess charges, or “markups,” on specific services were greater when performed by an emergency medicine physician compared with an internal medicine physician.

Meaning  Further legislation is needed to protect uninsured and out-of-network patients from excess charges in the emergency department.

Abstract

Importance  Uninsured and insured but out-of-network emergency department (ED) patients are often billed hospital chargemaster prices, which exceed amounts typically paid by insurers.

Objective  To examine the variation in excess charges for services provided by emergency medicine and internal medicine physicians.

Design, Setting, and Participants  Retrospective analysis was conducted of professional fee payment claims made by the Centers for Medicare & Medicaid Services for all services provided to Medicare Part B fee-for-service beneficiaries in calendar year 2013. Data analysis was conducted from January 1 to July 31, 2016.

Main Outcomes and Measures  Markup ratios for ED and internal medicine professional services, defined as the charges submitted by the hospital divided by the Medicare allowable amount.

Results  Our analysis included 12 337 emergency medicine physicians from 2707 hospitals and 57 607 internal medicine physicians from 3669 hospitals in all 50 states. Services provided by emergency medicine physicians had an overall markup ratio of 4.4 (340% excess charges), which was greater than the markup ratio of 2.1 (110% excess charges) for all services performed by internal medicine physicians. Markup ratios for all ED services ranged by hospital from 1.0 to 12.6 (median, 4.2; interquartile range [IQR], 3.3-5.8); markup ratios for all internal medicine services ranged by hospital from 1.0 to 14.1 (median, 2.0; IQR, 1.7-2.5). The median markup ratio by hospital for ED evaluation and management procedure codes varied between 4.0 and 5.0. Among the most common ED services, laceration repair had the highest median markup ratio (7.0); emergency medicine physician review of a head computed tomographic scan had the greatest interhospital variation (range, 1.6-27.7). Across hospitals, markups in the ED were often substantially higher than those in the internal medicine department for the same services. Higher ED markup ratios were associated with hospital for-profit ownership (median, 5.7; IQR, 4.0-7.1), a greater percentage of uninsured patients seen (median, 5.0; IQR, 3.5-6.7 for ≥20% uninsured), and location (median, 5.3; IQR, 3.8-6.8 for the southeastern United States).

Conclusions and Relevance  Across hospitals, there is wide variation in excess charges on ED services, which are often priced higher than internal medicine services. Our results inform policy efforts to protect uninsured and out-of-network patients from highly variable pricing.

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