Discovering healthcare provider behavior patterns through the lens of Medicare excess charge

Abstract

Background The phenomenon of excess charge, where a healthcare service provider bills Medicare beyond the limit allowed for a medical procedure, is quite common in the United States public healthcare system. For example, in 2014, healthcare providers charged an average of 3.27 times (and up to 528 times) the allowable limit for cataract surgery. Previous research contends that such excess charges may be indicative of the actual amount that providers bill to non-Medicare patients and subsequent cost-shifting behavior, where a healthcare provider tries to recoup underpayment by Medicare from privately insured, self-pay, out-of-network, and uninsured patients. Objectives The objective of this study is to examine the drivers of a provider’s excess charge patterns, especially the extent to which the degree of excess charges may be associated with physician characteristics, Medicare reimbursement policy, or socioeconomic status and demographics of a provider’s patient base. Methods Using data from the 2014 Medicare Provider Utilization files, we identify three procedures with the highest variation in Medicare reimbursements to study the excess charge phenomenon. We then employ a two-step cluster analysis within each procedure to identify distinct provider groups. Results Each procedure code yielded distinct healthcare provider segments with specific patient demographics and related behavior patterns. Cluster silhouette coefficients indicate that these segments are unique. Three random subsamples from each procedure establish the stability of the clusters. Conclusions For each of the three procedures investigated in this study, a sizeable number of healthcare providers serving poorer, riskier patients are often paid significantly lower than their peers, and subsequently have the highest excess charges. For some providers, excess charges reveal possible cost-shifting to private insurance. Patterns of excess charges also indicate an imbalance of market power, especially in areas with lower provider competition and access to health care, thus leading to urban-rural healthcare disparities. Our results reinforce the call for price transparency and an upper limit to overbilling.

Mental Health Care Utilization Among Parents of Children With Cancer

“…Additionally, we could not capture unmet needs among parents (ie, those who had MH needs but did not seek MH services), and we lacked data on enrollee race and ethnicity, income, and cancer stage, which may be important factors associated with MH care needs and merit future investigation. The observed rural-urban differences in MH care utilization among mothers may be associated with the differential billing behaviors of providers in rural areas, a factor we were unable to measure …”

“…The observed rural-urban differences in MH care utilization among mothers may be associated with the differential billing behaviors of providers in rural areas, a factor we were unable to measure. 56 …”

Association Between Private Equity Acquisition of Urology Practices and Physician Medicare Payments

“…9 A greater CMAA ratio may represent higher cost, greater physician market power, or cost-shifting to recoup underpayment from Medicare from higher-paying private insurers. 17 To estimate patient volume, we calculated the number of total Medicare patient visits by summing the number of unique patients for the following HCPCS codes: 99201, 99202, 99203, 99204, and 99205 for new patients; 99211, 99212, 99213, 99214, and 99215 for return patients. 10 We excluded payments to radiation oncologists or pathologists due to the lack of specificity for urologic services.…”

“…9 However, a lower CMAA may also reflect a reduced need to cost-shift, in which providers attempt to recoup underpayment from public payers in higher prices to commercial payers, due to a higher proportion of commercially insured patients. 6,17 We have previously shown that PE-backed urology practices have lower rates of Medicaid acceptance compared to non-PE practices, however, further examination of payer mix is needed to elucidate the drivers behind differences in CMAA ratio. 24 This study has several limitations.…”