Analysis of Price Transparency for Oncologic Surgery Among National Cancer Institute–Designated Cancer Centers in 2020 | Oncology | JAMA Surgery | JAMA Network
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Figure.  Markup Ratios for Oncologic Surgery
Markup Ratios for Oncologic Surgery

A, Distribution of markup ratios for oncologic surgery among National Cancer Institute–designated cancer centers, stratified by disease area and case severity. B, Maximum variation in markup ratios for oncologic surgery among National Cancer Institute–designated cancer centers, stratified by disease area and case severity.

aIn Medicare fiscal year 2020, cases with complications or comorbidities (CC) or major complications or comorbidities (MCC) were grouped into single Medicare Severity–Diagnosis-Related Group code (with CC or MCC) for breast, head/neck, and pelvic exenteration operations. Markup ratios and maximum variation in markup ratios for these disease areas are duplicated in CC and MCC columns for internal consistency.

Table.  Hospital Charges for Oncologic Surgery at National Cancer Institute–Designated Cancer Centers, Stratified by Disease Area and Case Severity
Hospital Charges for Oncologic Surgery at National Cancer Institute–Designated Cancer Centers, Stratified by Disease Area and Case Severity
1.
Centers for Medicare and Medicaid Services. Medicare program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the LongTerm Care Hospital Prospective Payment System and policy changes and fiscal year 2019 rates; quality reporting requirements for specific providers; Medicare and Medicaid electronic health record (EHR) incentive programs (promoting interoperability programs) requirements for eligible hospitals, critical access hospitals, and eligible professionals; Medicare cost reporting requirements; and physician certification and recertification of claims. Published 2018. Accessed March 8, 2021. https://www.govinfo.gov/content/pkg/FR-2018-08-17/pdf/2018-16766.pdf
2.
Agarwal  A, Dayal  A, Kircher  SM, Chen  RC, Royce  TJ.  Analysis of price transparency via National Cancer Institute-designated cancer centers’ chargemasters for prostate cancer radiation therapy.   JAMA Oncol. 2020;6(3):409-412. doi:10.1001/jamaoncol.2019.5690PubMedGoogle ScholarCrossref
3.
Gani  F, Makary  MA, Pawlik  TM.  The price of surgery: markup of operative procedures in the United States.   J Surg Res. 2017;208:192-197. doi:10.1016/j.jss.2016.09.032PubMedGoogle ScholarCrossref
4.
Centers for Medicare and Medicaid Services. FY 2021 IPPS final rule home page. Published 2020. Accessed March 8, 2021. https://www.cms.gov/medicare/acute-inpatient-pps/fy-2021-ipps-final-rule-home-page
5.
Sheppard  R, Postma  T. Hospital price transparency final rule. Published 2020. Accessed March 8, 2021. https://www.cms.gov/files/document/2020-12-08-hospital-presentation.pdf
6.
Pollack  RJ. Letter to Biden-Harris transition team. Published 2020. Accessed March 8, 2021. https://www.aha.org/system/files/media/file/2020/12/aha-letter-to-biden-harris-transition-team-price-transparency-rule-letter-12-21-20.pdf
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    Research Letter
    April 14, 2021

    Analysis of Price Transparency for Oncologic Surgery Among National Cancer Institute–Designated Cancer Centers in 2020

    Author Affiliations
    • 1Department of Otolaryngology–Head and Neck Surgery, Massachusetts Eye and Ear, Boston
    • 2Department of Otolaryngology–Head and Neck Surgery, Harvard Medical School, Boston, Massachusetts
    JAMA Surg. 2021;156(6):582-585. doi:10.1001/jamasurg.2021.0590

    In January 2019, the Centers for Medicare and Medicaid Services (CMS) began legally requiring hospitals to publish chargemasters online to promote price transparency.1 Hospital chargemasters list gross charges for all items and services, which are the undiscounted prices hospitals bill patients who are uninsured, self pay, or have out-of-network insurance.

    Understanding the cost of care is important for patients with cancer, who often suffer considerable financial burdens. However, a recent analysis2 examining price transparency for radiation therapy has raised concerns about the utility of public chargemasters. We therefore sought to investigate the information available to patients with cancer seeking surgical care at National Cancer Institute (NCI)–designated cancer centers.

    Methods

    We performed a cross-sectional analysis of hospital charges for inpatient cancer operations at NCI-designated cancer centers in March 2020. We excluded centers exempt from the Medicare Inpatient Prospective Payment System, because service pricing fundamentally differs for these hospitals. We systematically reviewed the public websites of each center to determine if a chargemaster was available. We then extracted Medicare Severity–Diagnosis-Related Group (MS-DRG) level charges (which hospitals were required to disclose) for cancer operations across 13 major disease areas (eMethods in the Supplement) as available. Institutional review board approval was not required by Mass General Brigham because this study analyzed publicly available data, and informed consent was likewise not required.

    We examined hospital charges for cancer operations by disease area and MS-DRG–specified case severity (without complications or comorbidities [CC], with CC, or with major CC [MCC]). We used descriptive statistics to characterize the proportion of cancer centers publicly disclosing hospital charges. We calculated the markup ratio3 between hospital charges and estimated Medicare payment amounts, which are based on the expected cost of care delivery, including hospital-specific factors, such as local wage indices (eMethods in the Supplement).4 We performed all analyses using R version 4.0.3 (R Foundation for Statistical Computing).

    Results

    In March 2020, 43 of 52 included NCI-designated cancer centers (82.7%) publicly disclosed MS-DRG–level charges for at least 1 inpatient cancer operation. Among these cancer centers, rates of disclosure varied by disease area. Whereas all centers (N = 43; 100.0%) disclosed charges for chest cases without CC or MCC, only 14 (of 43; 32.6%) disclosed charges for prostate cases without CC or MCC (Table).

    The median markup ratio between hospital charges and Medicare reimbursement ranged between 3.73 (interquartile range [IQR], 2.07-5.42; for prostate surgery with a MCC) and 6.57 (IQR, 3.55-9.05; breast surgery without a CC or MCC) across disease areas (Figure, A). Within disease areas, markup ratios varied substantially between hospitals. For example, there was an approximately 20-fold difference in markup ratios between hospitals for rectal operations with MCC (20.5) and pelvic operations with MCC (22.0; Figure, B).

    Discussion

    In this study, we found wide variation in the disclosure of charges for inpatient cancer operations by NCI-designated Cancer Centers as required by law. Among centers disclosing charges, there was substantial variation in markup ratios, which reflect hospital billing for charges in excess of estimated Medicare reimbursement. Our findings build on prior work suggesting that chargemasters listing undiscounted prices may provide limited benefit to patients with cancer and could potentially deter them from seeking care.2

    Recent action by the CMS could help address these concerns. In January 2021, the agency began requiring hospitals to additionally disclose payer-specific negotiated charges and discounted cash prices.5 However, the American Hospital Association has requested that the new US presidential administration rescind the law after unsuccessfully mounting legal challenges to enactment.6 While we recognize concerns about the potential burden of compliance during the ongoing COVID-19 pandemic, our findings underscore the need for better financial information to help patients make informed treatment decisions.

    Our study has limitations. Our cross-sectional analysis of inpatient oncologic operations may not reflect current charge disclosure practices or charge variation for other service types. Further research will be necessary to examine price transparency for cancer care amid ongoing reforms.

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    Article Information

    Accepted for Publication: January 25, 2021.

    Published Online: April 14, 2021. doi:10.1001/jamasurg.2021.0590

    Corresponding Author: Roy Xiao, MD, MS, Department of Otolaryngology–Head and Neck Surgery, Massachusetts Eye and Ear Infirmary, 243 Charles St, Boston, MA 02114 (roy_xiao@meei.harvard.edu).

    Author Contributions: Dr Xiao had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

    Concept and design: Xiao, Rathi.

    Acquisition, analysis, or interpretation of data: All authors.

    Drafting of the manuscript: Xiao, Rathi.

    Critical revision of the manuscript for important intellectual content: All authors.

    Statistical analysis: Xiao, Workman.

    Administrative, technical, or material support: Xiao, Miller, Xu.

    Supervision: Rathi.

    Conflict of Interest Disclosures: None reported.

    Disclaimer: The authors assume full responsibility for the accuracy and completeness of the ideas presented.

    References
    1.
    Centers for Medicare and Medicaid Services. Medicare program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the LongTerm Care Hospital Prospective Payment System and policy changes and fiscal year 2019 rates; quality reporting requirements for specific providers; Medicare and Medicaid electronic health record (EHR) incentive programs (promoting interoperability programs) requirements for eligible hospitals, critical access hospitals, and eligible professionals; Medicare cost reporting requirements; and physician certification and recertification of claims. Published 2018. Accessed March 8, 2021. https://www.govinfo.gov/content/pkg/FR-2018-08-17/pdf/2018-16766.pdf
    2.
    Agarwal  A, Dayal  A, Kircher  SM, Chen  RC, Royce  TJ.  Analysis of price transparency via National Cancer Institute-designated cancer centers’ chargemasters for prostate cancer radiation therapy.   JAMA Oncol. 2020;6(3):409-412. doi:10.1001/jamaoncol.2019.5690PubMedGoogle ScholarCrossref
    3.
    Gani  F, Makary  MA, Pawlik  TM.  The price of surgery: markup of operative procedures in the United States.   J Surg Res. 2017;208:192-197. doi:10.1016/j.jss.2016.09.032PubMedGoogle ScholarCrossref
    4.
    Centers for Medicare and Medicaid Services. FY 2021 IPPS final rule home page. Published 2020. Accessed March 8, 2021. https://www.cms.gov/medicare/acute-inpatient-pps/fy-2021-ipps-final-rule-home-page
    5.
    Sheppard  R, Postma  T. Hospital price transparency final rule. Published 2020. Accessed March 8, 2021. https://www.cms.gov/files/document/2020-12-08-hospital-presentation.pdf
    6.
    Pollack  RJ. Letter to Biden-Harris transition team. Published 2020. Accessed March 8, 2021. https://www.aha.org/system/files/media/file/2020/12/aha-letter-to-biden-harris-transition-team-price-transparency-rule-letter-12-21-20.pdf
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