December 8, 2017

ED visits are down—but ED facility fee spending is up, Vox analysis suggests

Daily Briefing

    Spending on emergency department (ED) facility fees rose steadily between 2009 and 2015, even as the overall number of ED fees billed declined, according to an analysis of Health Care Cost Institute (HCCI) data, Sarah Kliff writes for Vox. However, the American College of Emergency Physicians (ACEP) is pushing back against the findings, noting that the analysis examined only spending by employer-sponsored health insurance plans.

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    The analysis is part of a yearlong investigation by Kliff into a charge commonly called an "emergency facility fee"—a base fee most hospitals charge for any ED service. According to Vox, the fees generally are not publicly shared and vary widely by hospital.

    For the latest analysis, Vox collaborated with HCCI to analyze 70 million insurance bills from employer-sponsored plans for ED visits between 2009 and 2015. The analysis focused on the prices health plans actually paid hospital EDs for facility fees instead of the hospital's charges, which Vox reports often are higher than the amount ultimately paid.

    Findings

    Overall, the analysis found total spending on ED facility fees increased by 89%, or more than $3 billion, between 2009 and 2015—a rate of growth that is four times faster than overall health care spending growth and two times faster than outpatient health care cost growth.

    Although total spending was up, the analysis found that the number of ED facility fees billed in the data set fell by 2% between 2009 and 2015.

    The analysis also suggests that hospitals are increasingly billing ED care as complex visits, which carry higher facility fees. EDs bill visits on a scale of one to five, with a level five facility fee used for the most severe and complex cases. According to the HCCI database, the average price of a level three facility fee is $576. At level four, and the price rises to $810.

    According to Vox, it is unclear whether hospitals are coding visits as more complex because patients are presenting to EDs with more complicated cases or whether hospitals are reacting to a financial incentive to use higher coding levels.

    Further, according to Vox, there is limited oversight and standardization to how hospitals code ED visits. As a result, two patients who receive identical care in two different EDs could be coded differently.

    David McKenzie, reimbursement director for the ACEP, said, "There are charges that people could look at differently," adding, "Reasonable people could disagree on severity."

    According to Vox, former President Barack Obama's administration in 2013 proposed a rule to address the variability, but hospitals and physician groups pushed back, and the rule never took effect.

    Discussion

    Niall Brennan, executive director of HCCI, said the growth in facility fees "is having a dramatic effect on what people spend in a hospital setting, and as we know, that has a trickle-down effect on premiums and benefits."

    But experts are divided on what is driving that growth.

    Robert Derlet, professor emeritus of emergency medicine at the University of California-Davis, said hospitals are leveraging their market power to impose higher facility fees. Derlet said, "If you have a monopoly—and when it comes to the [ED], it's a monopoly—you can set any price you want."

    However, hospitals have said the facility fee is necessary for covering ED overhead, and that the number of ED visits coded as complex is likely a result of the country's aging population. Ashley Thompson, SVP for public policy at the American Hospital Association, said, "The number and complexity of ED visits continues to increase—this trend is not surprising given current population and health care-related trends."

    Jonathan Mathieu, chief economist at the Center for Improving Health Care Value in Colorado, said, "At face value, it might suggest that patients are showing up at the [ED] sicker or with more serious injuries." But he added, "This feels a little shaky, for a lack of a more elegant term, because it is the same trend year over year over year."

    American College of Emergency Physicians push back on data

    In a statement, ACEP President Paul Kivela questioned the findings, saying they rely on a data source that only includes claims from employer-sponsored health plans, which he wrote "leaves out a major portion of the picture and skews the article's findings."

    As an example, he wrote, "Vox says it found that emergency department visits have dropped by 2% between 2009 and 2015—yet CDC data show that visits have actually increased overall by 3.9% from 2009 to 2014. Such a disparity calls into question the rest of the findings presented in the piece."

    Further, he wrote, "Unfortunately, Vox's data source is not independent, because the data used for the article come directly from a limited subset of claims from four major commercial insurers, which have a long history of denying emergency department claims" (Kliff, Vox, 12/4; Baker, "Vitals," Axios, 12/5; Minemyer, FierceHealthcare, 12/4; Gooch, Becker's Hospital CFO Report, 12/4; Gooch, Becker's Hospital Review, 12/6).

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