Hospitals’ price increases for evaluation and management (E&M) services over the past year outpaced those of similar services performed outside of the hospital setting, according to a new report from FAIR Health.
From November 2020 to November 2021, the nonprofit’s claims data suggest (PDF) hospitals charged 7% more and ultimately received 5% more for E&M services, which generally include illness diagnoses and other medical decision-making.
In addition to being higher than non-hospital E&M (4% charge increase, 4% actual amount increase), hospital E&M’s one-year index price growth was also higher than the four other service areas evaluated in the report.
These included surgery procedures (5% charge increase, 4% actual amount increase); pathology and laboratory equipment and services (5% charge increase, 2% actual amount increase); medicine excluding E&M services (2% charge increase, 2% actual amount increase); and radiology equipment and services (2% charge increase, 1% actual amount increase).
These index price changes specifically describe professional fees and other related costs and do not reflect facility fees, FAIR Health wrote.
Hospital E&M charges and negotiated rates have risen more steeply than any of the six areas FAIR Health has been monitoring since 2012, according to the latest report.
The group wrote that two codes related to emergency department visits (CPT 99285 and CPT 99284) “were both integral” to increases in hospital E&M charges during the past year. For negotiated rates, only the code tied to “immediate threat to life or function” in the emergency room (CPT 99285) played the biggest role in 2021 gains.
Utilization trends outlined in the report painted a picture of higher telehealth usage but reduced healthcare engagement across all other settings measured by FAIR Health through 2020.
While telehealth grew over 7,000% to 0.22% of all claims in 2019 to 15.41% in 2022, utilization dropped 38% in ambulatory surgical centers, 30% in emergency rooms, 16% in urgent care centers and 4% in retail clinics during the same period.
Claims related to exposure to communicable diseases rose in prominence across retail clinics, urgent care centers and telehealth in 2020, with COVID-19 testing or treatment unsurprisingly driving its increased frequency.
FAIR Health’s analysis pulls on its database of 36 million healthcare claims records from privately insured patients and voluntarily participating third-party administrators.
Robin Gelburd, president of FAIR Health, said the nonprofit’s latest claims analysis gives a clear impact on how COVID-19 influenced prices and utilization during the heart of the pandemic.
“We hope that this new edition, like those in previous years, continues to inform decision making throughout the healthcare sector by payers, providers, government officials, policymakers, academic researchers and others,” Gelburd said in a statement.
Pundits have pointed to years of hospital and provider consolidation as a driving factor in steadily rising healthcare costs. Although industry groups have often pushed back on such arguments, the Biden administration has ramped up its scrutiny of provider dealmaking in hopes of limiting anti-competitive consolidation.
National-level agencies and policymakers, meanwhile, have sought to rein in prices via site-neutral payments, hospital price transparency and legislation against surprise billing.