The Bipartisan Roundtable on Hospitals and Healthcare took testimony on facility fees and other cost drivers from the perspective of insurers, while state Comptroller
"This is going to be a tough spot for us," Lembo told the committee.
The state of
"That's pretty staggering," Wood said.
Temple said the increases in cost have outpaced inflation by 7 percent to 10 percent over the last few years.
She said they are not always easy conversations to have with hospitals and physicians, but they are pushing for evidence of efficiencies and what they are yielding.
Welsh said they looked at the claims of a patient who was on a drug regime for cancer before his physician's practice was bought by a hospital and afterwards.
They found the average unit cost for the pharmaceutical was
In another example, Welsh said a very simple procedure, such as wart removal in an dermatology practice, went from an estimated
Common gastrointestinal procedures, such as colonoscopies and endoscopies, jumped dramatically when practices were bought compared to independent offices not affiliated with a hospital. The average cost for those affiliated with a hospital were
Welsh said private equity firms are not only buying up ambulatory surgery centers, but nonprofit hospitals with the purpose of "terminating their in network contracts and billing strictly at the out-of-network rates solely to maximize profits."
He said given the desire for profits through facility fees, they have seen nationally, doctors with office suites, charging facility fees for such routine procedures, such as ear wax removal. Welsh said they have refused to pay fees in those instances.
Welsh said providers are also now waiving cost share obligations with for instance,
The official said a routine colonoscopy would be reimbursed by
Welsh said he has seen that type of behavior "anecdotally" in
"They feel they are being unfairly targeted because of their generosity. I think my message is, in the end for everybody, customer, client, provider, carrier, this is simply not beneficial or productive for anybody," Welsh said of facility fees.
Lembo told the committee the state may need more regulatory options to protect consumers.
He said consolidation of practices and hospitals may improve care coordination, but the state should ensure they result in better care and lower utilization, rather than higher prices because hospitals would have increased market power.
Lembo suggested the state may want to require each individually licensed hospital in a system to negotiate contracts independently, and require a 30-day mandatory mediation period after a contract expires.
He said now when contracts end, it amounts to "an exercise in brinkmanship" by the insurer and the hospital with patients and employers caught in the middle.
The comptroller also suggested requiring an extended period where hospitals must continue to accept patients at the previous rates after negotiations break down. This would give them additional time to find new providers.
Lembo also talked about charges for what he said was essentially an urgent care visit, but was billed at emergency room rates.
An audit being conducted for the state by
"... virtually all encounters at either free-standing or in-hospital ERs are billed at ER rates rather than lower urgent care rates, regardless of whether a patient saw an ER doctor for a real emergency ...," Lembo said.
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