Health insurance companies may be overpaying for common radiology services, according to a study published in Radiology.
“Many commercial plans are leaving money on the table when negotiating price with hospitals, especially for expensive CT and MRI scans,” said study co-author Ge Bai, Ph.D., CPA, professor of accounting at the Johns Hopkins Carey Business School in Baltimore, Maryland. “High prices paid by commercial plans eventually come back to bite US employers and workers through high premiums and out-of-pocket costs.”
Hospitals generally contract with multiple insurance plans, some of which are managed by the same insurance company. The study found that insurance companies negotiated different prices for the same services within the same hospital and even negotiated different prices across different health plans they themselves managed. Services that use high-cost equipment, such as CT and MRI, had wider variations and higher prices relative to Medicare when compared to other radiology services.
The researchers studied commercial negotiated prices (not list prices or charges) from private payers for the 13 shoppable radiology services designated by the US Centers for Medicare and Medicaid Services (CMS).
On average, the maximum negotiated price for shoppable radiology services was 3.8 times the minimum negotiated price in the same hospital and 1.2 times in the same hospital-insurance-company pair.
CT and MRI services had wider price gaps both within a hospital and within a hospital-insurance-company pair as well as higher prices relative to Medicare when compared to other radiology services. The widest price gaps were found in brain CT, where 25% of hospital-insurance-company pairs had their maximum negotiated price more than 2.4 times their minimum negotiated price.
“Commercial prices for CT and MRI scans on average varied four- to five-fold within the same hospital and as much as high as nine- to