Rand Reports on Prices Paid to Hospitals by Private Health Plans
This week, the Rand Corporation released a report outlining the levels and variations of hospital prices paid by employers and private insurers across the United States from 2018 to 2020. As you know because employer-sponsored spending comes from employee wages and benefits, employers have a responsibility to administer benefits in the interest of participants.
The lack of transparency of prices in the health care market limits the ability of employers to knowledgeably develop or implement benefit design decisions. The study by Rand Corporation uses medical claims data from a large population of privately insured individuals, including hospitals and other facilities from across America. Some key findings of this report include:
- Some states (Hawaii, Arkansas, and Washington) had relative prices below 175% of Medicare prices, while other states like (Florida, West Virginia, and South Carolina) had relative prices that were at or above 310% of Medicare prices.
- In 2020, across all hospital inpatient and outpatient services (including both facility and related professional charges), employers and private insurers paid 224% of what Medicare would have paid for the same services at the same facilities.
- The 224% total for 2020 is a reduction from the 247% figure reported for 2018 in the previous study owing to an increase in the volume of claims from states with prices below the previous mean price.
- Among the common data contributors in this round and the previous round, 2020 prices average 252% of Medicare, which is similar to the 247% relative price reported in the previous round for 2018.
- Prices for common outpatient services performed in ambulatory surgery centers average 162% of Medicare payments, but if paid using Medicare, payment rates for hospital outpatient departments would have averaged 117% percent of Medicare.
- Although relative prices are lower for ASC claims priced according to HOPD rules, HOPD prices are higher than ASC prices.
- Very little variation in prices is explained by each hospital’s share of patients covered by Medicare or Medicaid; a larger portion of price variation is explained by hospital market power.
- Prices for COVID-19 hospitalization were similar to prices for overall inpatient admissions and averaged 241% of Medicare.
HHS through the Substance Abuse and Mental Health Services Administration (SAMHSA) announced $2 million in funding to establish a national center of excellence (CoE) on social media and mental wellness. The purpose of the CoE will be to develop and disseminate information, guidance, and training on the impact—including benefits and risks—that social media use has on children and youth, especially the risks to their mental health. This CoE will also examine clinical and social interventions that can be used to mitigate the risks. The funding will fund one award for $2 million per year, up to five years. Eligible stakeholders can apply here by July 18.
The House Energy & Commerce Committee advanced six health care bills Wednesday to the House floor, including two that renew several mental health programs and a bill to establish an agency geared towards accelerating biomedical innovations. The set of health care legislation garnered wide bipartisan support of committee members. The panel advanced its mental health package, H.R. 7666 the Restoring Hope for Mental Health and Well-Being Act of 2022, by voice vote after voting to authorize a number of amendments. The committee also voted in a bipartisan manner to advance H.R. 5585, the Advanced Research Project Agency -Health Act, that would stand up the Advanced Research Projects Agency for Health.
Senate Health, Education, Labor and Pensions Committee Chair, Senator Patty Murray (D-WA), and Ranking Member, Senator Richard Burr (R-NC), released a discussion draft (section-by-section summary) of the FDA Safety and Landmark Advancements (FDASLA) Act. This legislation would reauthorize the Food and Drug Administration’s (FDA) prescription drug, generic drug, biosimilar, and medical device user fee agreements. The legislation also includes provisions to strengthen oversight of cosmetics and dietary supplements, modernize the regulation of diagnostic tests, bring more competition to the market, and prepare the FDA for the next generation of medical products.
U.S. Senators Chris Murphy (D-CT) and Bill Cassidy, M.D. (R-LA), introduced legislation on Tuesday, May 10, to reauthorize the historic federal mental health and substance use disorder programs. These initiatives were signed into law as part of the Mental Health Reform Act and are set to expire this September. The Mental Health Reform Reauthorization Act of 2022 also addresses Covid-19’s impact on the nation’s mental and behavioral health crisis, as outlined by the administration, especially among youth and adolescents. The legislation incorporates conversations from the Senate Health, Education, Labor, and Pensions (HELP) committee in addition to feedback from patients, families, health care providers, advocacy organizations, and state, local, tribal, and territorial governments.
The Senate Special Committee on Aging held a hearing focused on senior mental health and integrated care. Senators and panelists discussed opportunities to improve mental health services for older adults and address gaps in services. Senators also discussed the complexity of navigating separate programs and how integrated care can better improve mental health care delivery for older adults. Of note, Senator Casey and Senator Scott introduced the Advancing Integration in Medicare and Medicaid Act (AIM Act), which is a bipartisan bill to require states to develop a strategy for integrating and coordinating health benefits for full-benefit dually eligible beneficiaries. Senator Casey also introduced the Supporting States in Integrating Medicare and Medicaid Act, which is similar in scope to the bipartisan bill, but also additionally provides funding support for states.
The Congressional Budget Office (CBO) released a report estimating the federal budgetary costs of a policy that would lower the age of eligibility for Medicare. The estimate was prepared in conjunction with the staff of the Joint Committee on Taxation (JCT). CBO and JCT estimate that lowering the age of Medicare eligibility to 60 would increase federal budget deficits by $155 billion over the 2026–2031 period through the effects of that policy on federal revenues and mandatory spending. Enacting the policy would have a significant effect on primary sources of health insurance coverage, and it would increase the number of people insured.
CMS released a resource that summarizes current federal requirements for state Medicaid agencies related to eligibility renewals and redeterminations, application processing, fair hearings, coordination with the Marketplace, and other processes. The tool also highlights flexibilities available to states on eligibility and enrollment processes during the unwinding period once the federal Public Health Emergency (PHE) ends. The tool again strongly encourages states to distribute renewals across the 12-month unwinding period and to initiate renewals for no more than 1/9th of the state’s total caseload. States that initiate renewals at a faster pace may risk inappropriate terminations, as well as imposition of compliance action for violations for federal requirements.
Last week, NiceRx released a new health report analyzing states with the highest levels of obesity, which suffer the most from mental health conditions, which are spending the most time searching for advice on health issues, as well as those seeking out alternative therapies. Utilizing data from the CDC and SAHMSA, the report found that the states with the highest obesity rates are Mississippi (39.7%), West Virginia (39.1%), and Alabama (39%) and states with the highest levels of mental health illness are Utah (29.65%), Oregon (27.33%), and West Virginia (26.05%). Using searches from Google Ads Keyword Planner, the report revealed that the most health-conscious states are Georgia (235,227 searches per 100,000 people), Massachusetts (235,176), and New York (228,892).