Friday, June 27, 2014 Where It's At: Study Says Physical Therapy Charges 40% – 60% Higher in Hospital Outpatient Departments Than Freestanding Clinics A new report comparing some common tests, procedures, and treatments has found that hospital outpatient departments (HOPDs) consistently charge more than community-based settings for the same services. For physical therapy, HOPDs charged on average 50% more than freestanding clinics. The study, conducted by the former Center for Studying Health System Change and published by the National Institute for Health Care Reform, used private insurance claims data from 2011 for about 590,000 active and retired nonelderly autoworkers and their dependents to track charges for magnetic resonance imaging (MRI) of the knee, colonoscopies, common laboratory tests, and physical therapy. What researchers found was that where the service was provided made a big difference in how much was charged. In looking at physical therapy, the study's authors limited investigations to therapeutic exercise and manual therapy—"2 common physical therapy services" that accounted for $25.9 million of the $38 million spent on physical therapy among the claims analyzed, according to the report. Their findings: in looking at 136,000 services provided, "average prices were 41 percent and 64 percent higher in HOPDs for therapeutic exercises and manual therapy, respectively, than in community settings." While not significant enough to account for the differences, the study notes that patients receiving physical therapy in HOPDs were somewhat "sicker" than patients receiving the other procedures, treatments, and tests studied.. " The authors write, "the health status difference might be explained because patients with hospital inpatient stays—say for a knee replacement—are more likely to be referred to physical therapy in HOPDs than in community settings." Other findings in the report pointed to some even more dramatic differences. These include: MRI of a knee was about $900 in hospital outpatient departments and about $600 in physician offices or freestanding imaging centers. Charges for a basic colonoscopy averaged $1,383 compared with $625 in community settings. The cost of a common blood test (comprehensive metabolic panel) was about 3 times higher in HOPDs—about $37 compared with $13 in community settings. Authors write that the findings show that there is an opportunity for private insurers to reduce spending by looking at ways to incentivize the use of lower-priced community providers through excluding higher-priced providers from networks, implementing a tiered system that requires patients to pay more when using these providers, or capping the amount of payment to in network providers for particular services.