Wednesday, May 1, 2019

NYT Highlights Crazy Range of Payer Payments ($11-$1000) For Same Lab Tests

On April 30, 2019, Margot Sanger-Katz at NYT highlights the wide (or wild) discrepancies in payment rates for common lab tests.  Article here.
  • Update: for a May 9 NYT follow up article on hospital payments from private payers vs Medicare fee schedules, here.  Trade press here.
    • While much is made of the "opaque health market," everyone can look up all the Medicare fees, and every self-insured firm knows (or can easily know) what it pays, and every payer knows what it pays, so it's the variances are the world's worst kept secret.  
    • OK, yes, it's opaque if you just cut your hand and have to go to the E.R. in five minutes. 
    • But, if you are a self-insured employer and want to know your 2018 rates paid vs CMS rates, you could figure most of it out in an hour.
The NYT article is a window into data published by the "Health Care Cost Institute" - here.  For example, prices for a comprehensive 14-analyte metabolic panel (80053) range from about $10 to $1000.  Sanger-Katz emphasizes this aren't charges, but paid prices in actual data across a range of real insurers.  One of the take-home lessons is that some cities have narrow price bands (Knoxville, Cleveland) and others have crazy-wide price bands (Boston, San Francisco).

You Saw This in PAMA Nationwide Lab Price Data

New CMS CLFS PAMA prices became effective in January 2018, based on reported private payer data (reported by labs) in 1H2017 and released by CMS in September 2017.    While CMS released summary median price tables, they also put the full reported lab data into a giant cloud data archive that can be searched online. 

This CMS data showed all the payment rates, for every lab test reported, so with a little effort, you could see similar data to the NYT article this week, in September 2017 for free on the CMS website.

It takes a little practice to use it (see the FILTER tab and then use the EXPORT tab) but the CMS PAMA raw cloud data is here.


For example, if you go to the cloud interface and filter for HCPCS 80053, you get 106,651 lines of data.  This gives a 1.5MB Excel file with payments running from the low pennies to $65,000.  Even assuming the last number represents 4,440 claims at $14.65 each, there were still for example 20,000 payments between $100 and $200. 


Also for CY2016 (actually 1HCY2016), BRCA 81211 payments numbered 94,977 (implying about 180,000 payments for a full year).   Common prices included $3,123 and $3,173 but there were dozens of payments between $4000 and $17,000.