The continued consolidation of physician groups and health systems is pushing procedures to hospital outpatient departments over ASCs, driving Medicare costs up, according to a study published July 25 in Science Direct.
The study analyzed data from 2013 to 2019 from 1 million arthroscopy and 10 million colonoscopy procedures in the U.S. Medicare population to determine how vertical integration changes services.
Here are five key notes:
1.Medicare reimburses ASCs at roughly one-half to two-thirds the reimbursement rate for HOPDs, meaning that "vertical integration can create incentives to perform procedures" at HOPDs.
2. The report found that following vertical integration, there is a 5 percentage point increase in the use of HOPDs instead of ASCs for arthroscopy and a 6.8 percentage point increase for colonoscopies.
3. The report also estimated that vertical integration leads to 3.1 percentage point increased probabilities of choosing an HOPD over an ASC for arthroscopies and 8.1 percentage point increased probabilities for colonoscopies.
4. For those two procedures, the report estimated changing from "status quo to fully integrated relationships for all physicians" will lead to a $315.4 million increase in Medicare spending and a $63.1 million increase in patients' out-of-pocket costs.
5. Scaling the change in Medicare payments by the increased use of ASCs equates to an estimated 43% and 35% higher Medicare payments at HOPDs than ASCs for arthroscopy and colonoscopy, respectively.