How Have Hospital Pricing Practices for Surgical Episodes of Care Responded to Affordable CareAct-Related Medicaid Expansion?

Abstract

ObjectiveTo determine how Medicaid expansion under the Affordable Care Act of 2010 (ACA) has affected hospital pricing practices for surgical episodes of care. MethodsGiven that safety net hospitals would be more vulnerable to decreasing reimbursement due to an increase in proportion of Medicaid patients, we utilized the Premier Healthcare Database to compare institutional charge-to-cost ratio (CCR) in safety net hospitals vs nonsafety net hospitals for 8 index urologic surgery procedures during the period from 2012 to 2015. The effect of Medicaid expansion on CCR was assessed through difference-in-differences analysis. ResultsCCR among safety net hospitals increased from 4.06 to 4.30 following ACA-related Medicaid expansion. This did not significantly differ from the change among nonsafety net hospitals, which was from 4.00 to 4.38 (P = .086). The census division with the highest degree of Medicaid expansion experienced a smaller increase in CCR among safety net hospitals relative to nonsafety net (P < .0001). CCR increased by a greater degree in safety net hospitals compared to nonsafety net in the census division where Medicaid expansion was the least prevalent (P < .0001). ConclusionSafety net hospitals have not preferentially increased CCR in response to ACA-related Medicaid expansion. Census divisions where safety net hospitals did increase CCR more than their nonsafety net counterparts do not correspond to those where Medicaid expansion was most prevalent. This could indicate that, despite being more vulnerable to an increased proportion of more poorly reimbursing Medicaid patients, safety net hospitals have not reacted by increasing charges to private payers.