Advocates for Evidence-Based Health Policy Speakers
Reimbursement Rises Slower than Charges
It is no secret that relatively stagnant reimbursements for emergency department (ED) visits present stiff financial challenges to the practice of emergency medicine. In the face of increasing costs of care, EDs depend on adequate reimbursement in order to remain financially viable.
This study examined the differences in reimbursement between private and public (i.e. Medicare, Medicaid) insurance for ED visits between 1996-2015. To do this, the researchers looked at the Agency for Healthcare Research and Quality’s Medical Expenditure Panel Survey for over 114,000 ED visits that did not result in hospitalization. They then tabulated expenditures per year by insurance type.
Their results revealed several findings. The average expenditure by a private insurer for an ED visit in 2015 was $1,676 vs. $892 for Medicare and $504 for Medicaid. Charges for ED visits rose substantially over the same time period and in 2015 were higher for patients covered by Medicare (approximately $5,000/visit) and lowest for Medicaid (approximately $3,000/visit).
What is also striking about the data is the declining reimbursement-to-charge ratio, meaning a shrinking reimbursement from all insurers as a proportion of charges. Reimbursements to EDs has risen slowly, however charges have increased at a far faster rate. In 1996, private insurance covered 75% of charges for an ED visit. By 2015 that number shrunk to 47%. At the lowest end, Medicare reimbursed just 24% of the amount charged.
The numbers illustrate that private insurance reimburses at nearly double the rate of Medicare and more than triple the rate of Medicaid. The authors point to decreased regulatory authority and bargaining power for private insurers compared to public insurers as one cause for the difference. There was no substantial difference in the intensity of services between groups. Hospitals also do not appear to be charging private insurance more than public insurance for the same service.
These data show that increases in charges for ED visits have far outpaced the rise in reimbursement and that public insurance reimbursed at a far lower rate than private insurance. In order to ensure that EDs can remain financially viable, it will be important to understand and try to mitigate increases in hospital charges while also advocating for fair reimbursement for the extremely valuable services that EDs provide.
This Health Policy Journal Club review is a collaboration between Policy Prescriptions® and the Emergency Medicine Residents’ Association. It is written by Milap Mehta, MD. He is a third year emergency medicine resident at The Ohio State University.
Abstract
Between 1996 and 2015, mean annual increases in per visit emergency department (ED) expenditures were significantly greater for private insurance than Medicare, Medicaid, and no insurance, with no corresponding difference in ED charges. Expenditures as a proportion of charges decreased for all insurers over time. Private insurance had the highest expenditure-to-charge ratio in each year.
PMID: 29985689
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