2014 Government Regulations & Business Summit
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By Richard Asinof
(Updated, 2:45 p.m.)
PROVIDENCE – A new comprehensive study released Wednesday by R.I. Health Insurance Commissioner Christopher F. Koller documents payment disparity by hospitals and payers in Rhode Island.
The study, “Variation in Payment for Hospital Care in Rhode Island,” conducted by Xerox, examined inpatient and outpatient costs at Rhode Island’s 11 acute care community hospitals as well as reimbursements by government and commercial payers for 2010.
The study’s findings found a large disparity in the commercial health insurance market, with the highest paid hospital receiving twice as much per stay as the lowest-paid hospital for similar care.
In addition, the commercial health insurers paid more to Lifespan and Care New England hospitals than to other hospitals. And, commercial plans paid more than either Medicaid or Medicare.
The study found that inpatient specialty care for maternity, mental health, orthopedic and oncology services showed similar patterns of variation.
Further, the study found that higher cost hospitals, especially Care New England and Lifespan hospitals, tended to be paid more, but that limited evidence of hospital quality, such as patient satisfaction and patient safety indicators, did not show a direct link with payment.
In a specific section written about future policy initiatives by Koller, the health insurance commissioner identified five options for policy makers to achieve payment alignment, parity and accountability, including an all-payer rate-setting system.
The policy options include:
Gail Leach Carvelli, director of media relations at Lifespan, provided the following statement in response to the study:
“We have stated many times over the past several years that we are transforming the way we deliver health care to provide the most affordable, accessible, high quality care, which the people of Rhode Island expect and deserve. We are at a time when our entire reimbursement system is being overhauled, when federal dollars are shrinking, discharges are dropping and needs are growing.
“There are enormous differences in the services, such as regionalized stroke care, trauma care, and cardiac care, provided at the hospitals in Rhode Island, as well as the amount of charity care provided at various hospitals in the state.
“The study does not acknowledge the cost associated with operating tertiary services or medical training programs or new buildings or technologies. We know our hospitals are lower cost than Boston’s teaching hospitals, and we also know we can do a better job of stabilizing the cost of health care, which is what we are committed to do.”
To view the study, visit: www.ohic.ri.gov.