Variation in Price-Negotiated Rate by Private Insurers for Cancer Operation

Abstract

INTRODUCTION: On January 1, 2021, the Centers for Medicare and Medicaid Services (CMS) implemented the Hospital Price Transparency Rule which requires hospitals to publicly report on their website the insurer-specific negotiated prices for 70 CMS-specified, high-volume common services. The variation in price-negotiated rate for oncologic surgical procedures across private health insurers is unknown. METHODS: Hospital websites were systematically scanned for prices listed by insurer CPT code by Turquoise Health, a third-party search engine that aggregates the information weekly into a searchable database. On February 22, 2022, we queried the database to obtain payer-specific prices for these CPT codes for pancreas, lung, esophagus, colon and rectal resection. To account for appropriate variation in price (eg cost of living), each amount was standardized using the CMS area wage index. Price for each procedure was compared across the 5 largest insurers: United Healthcare, Blue Cross Blue Shield, Cigna, Humana, and Aetna. RESULTS: Payer-specific negotiated price was reported by 942 hospitals performing these procedures and demonstrated wide variation within and across insurers. For example, the median rate for a video-assisted thoracic surgery wedge resection across the 5 major insurers varied 2.1-fold ($2,948 to $1,841). For Cigna, the interquartile range of rates for the Whipple varied 3.5-fold ($2,076 to $7,321). Similar patterns were observed for each of the procedures evaluated (Figure).FigureCONCLUSION: Negotiated prices for surgical oncology procedures reported by hospitals vary greatly within and across individual private insurers. These findings suggest that Hospital Price Transparency Rule may identify unwarranted variation in private-payer prices for operation.