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Comparing Average Rates for Select Anesthesiology, Emergency Medicine, and Radiology Services by Local Areas

CBSA-IN-Network

When a person unknowingly receives health care services from a provider that is outside of their insurer's network, it gives rise to the potential for a "surprise bill". Congress continues to consider legislation aimed at reducing the financial burden of "surprise bills" for patients. The approach approved by committees in both the House and Senate is to set a benchmark for the amount that can be billed for these out-of-network services based on the rate paid for the same or similar services in a geographic region. (The legislation approved by the House Energy and Commerce Committee also includes an option for providers to appeal the amount to an arbitrator.) However, there is no standard definition of a geographic region, which could possibly refer to either a state or metropolitan area.

We previously presented data comparing average commercial and Medicare rates for select anesthesia, emergency room and radiology services by state. Within a state, the amount paid for the same service can vary widely across metropolitan areas. To understand and illustrate that variation, we repeated our previous analysis at the core-based statistical area (CBSA) level. CBSAs are urban centers and the surrounding areas and represent an alternative definition of a local health care market.

As before, we examined the allowed amounts (the total payment made by insurers and patients) for the most common anesthesia, emergency room, and radiology services when they were performed by an in-network provider for individuals with commercial employer-sponsored insurance (ESI). Specifically, we calculated the mean and median in-network rates, as well as the ratio of the commercial ESI to Medicare fee-for-service mean allowed amounts. We only included providers with a specialty that matched the service category (for example, anesthesiology services provided by anesthesiologists). We do not include facility fees or amounts for ancillary services.

Key Findings:

  • There was greater variation in the rates paid across CBSAs than across states.
  • Within state variation in CBSA median allowed amounts was substantial in many cases.

Variation across CBSAs

As before, the average commercial allowed amounts were almost always higher than Medicare fee-for-service. However, compared to the variation we observed at the state level, the variation in the ratio of the commercial and Medicare rates for the selected services across CBSAs was greater, with the top of the range being as much as 9 times higher. Figure 1 shows the state and CBSA variation in commercial ESI to Medicare ratios of mean allowed amounts. The blue circles show the state level distribution while the green circles show CBSAs. Select a state or circle to highlight the values for that state and the CBSAs within the state. Use the arrows at the top of the dashboard or click the boxes to see different services and median commercial allowed amounts.

Variation within States

In most states we observe several distinct metropolitan areas. In several cases, we observe substantial variation in the median allowed amounts in the different CBSAs. For example,

  • In Ohio, the median allowed amount in 2017 for CPT 01967 - Anesthesia for labor during planned vaginal delivery ranged from $688 in Dayton to $1,450 in Cincinnati, with a state median of $1,078.
  • In Florida, the median allowed amount for CPT 99285 – Emergency department visit, problem with significant threat to life or function ranged from $216 in Tallahassee to $1,347 in Crestview, with a state median of $567.
  • In Michigan, the median allowed amount in 2017 for CPT 74177 – CT scan of abdomen and pelvis with contrast ranged from $134 in Detroit to $343 in Ann Arbor, with a state median of $141.

Figure 2 shows CBSA and state level median allowed amounts for selected procedures in 2017 and commercial ESI to Medicare mean allowed amount ratios. Explore the data by selecting a service (Anesthesia, ER, or Radiology) and a specific procedure. Click on a state to see the median allowed amounts for the CBSAs in that state.

Methods Note

Estimates for the employer sponsor insured (ESI) population are based on 2017 claims data from the Health Care Cost Institute. All costs represent only in-network professional fees - amounts paid to providers participating in payer's network; they do not include facility fees or out-of-network professional fees. ESI data were restricted to claims where service category and provider specialty were aligned - anesthesia provided by anesthesiologists, radiology provided by radiologist, ER services provided by emergency medicine specialists. ESI data were further restricted by place of service and only include professional services performed in inpatient hospitals, outpatient hospital departments (on or off campus) and emergency departments. CBSA is based on provider address. Data were suppressed according to HCCI masking rules based on the number of procedures performed at a given level of reporting. Medicare fee-for-service estimates were obtained from the Physician and Other Supplier Data CY 2017 public use file from CMS.