Microbiologists Take Note! UPenn Study Using Next-Generation Sequencing Finds Stethoscopes Harbor Vast Amounts of Bacteria, Including Staphylococcus Aureus, Which Causes Deadly Hospital-Acquired Infections

Researchers also found Staph and other bacteria on stethoscopes after they had been cleaned, leading to scrutiny of cleaning agents and methods

Microbiologists, anatomic pathologists, and clinical laboratory leaders should be intrigued by a university study which found stethoscopes worn by caregivers contained vast amounts of bacteria, including Staphylococcus aureus (Staph), a major cause of hospital-acquired infections (HAIs).

Using next-generation DNA sequencing, University of Pennsylvania Perelman School of Medicine researchers found the deadly bacteria on stethoscopes stored and used in, of all places, an intensive care unit (ICU), where patients are particularly vulnerable to infection.

Even more compelling was the discovery of DNA from the Staph bacteria on the stethoscopes even after they were cleaned. Though the tests could not differentiate between live and dead bacteria, the researchers found other non-Staph bacteria as well, including Pseudomonas and Acinetobacter.

Similar conditions could no doubt be found in most healthcare settings in America, highlighting the critical importance for rigorous cleaning procedures and protocols.

The researchers published their paper in Infection Control and Hospital Epidemiology, the journal of the Society for Healthcare Epidemiology of America (SHEA).

Deadly Bacteria Becoming Harder to Kill

HAIs are becoming increasingly difficult to prevent partly because Staph bacteria, such as Methicillin-resistant Staphylococcus aureus (MRSA), are becoming increasingly resistant to antibiotics, according to the Centers for Disease Control and Prevention (CDC).


“The study underscores the importance of adhering to rigorous infection control procedures, including fully adhering to CDC-recommended decontamination procedures between patients, or using single-patient use stethoscopes kept in each patient’s room,” said Ronald Collman, MD (above), the study’s senior author and Professor of Medicine, Pulmonary, Allergy, and Critical Care at UPenn’s Perelman School of Medicine, in a news release. (Photo copyright: Penn Medicine.)

The researchers acknowledged that previous culture-based bacterial studies looked at stethoscopes, but noted the results fell short of the view next-generation sequencing technology can offer for identifying bacteria, as well as determining the effectiveness of cleaning chemicals and regiments.

“Culture-based studies, which focus on individual organisms, have implicated stethoscopes as potential vectors of nosocomial bacterial transmission [HAI]. However, the full bacterial communities that contaminate in-use stethoscopes have not been investigated,” they wrote in Infection Control and Hospital Epidemiology.

Study Employs RNA Deep-Sequencing

The UPenn researchers used bacterial 16 ribosomal RNA (16S rRNA gene) deep-sequencing to study the bacteria, Becker’s Healthcare explained.

The stethoscopes analyzed were in-use as follows:

• 20 worn by physicians, nurses, and respiratory therapists;

• 20 single patient-use disposable stethoscopes available in ICU patient rooms; and,

• 10 unused single-use disposable stethoscopes to serve as a control.

All stethoscopes worn and/or used in the ICU were found to be contaminated with abundant amounts of Staphylococcus DNA. “Definitive” amounts of Staph was found by researchers on 24 of 40 tested devices, noted MedPage Today.

“Genera relevant to healthcare-associated infections (HAIs) were common on practitioner stethoscopes, among which Staphylococcus was ubiquitous and had the highest relative abundance (6.8% to 14% of containment bacterial sequences),” the researchers noted in their paper.

Cleaning Methods Also Examined

The researchers also studied the hospital’s cleaning agents and procedures:

• 10 practitioner stethoscopes were examined before and after a standard 60-second cleaning procedure using hydrogen peroxide wipes;

• 20 additional stethoscopes were assessed before and after cleaning by practitioners using alcohol wipes, hydrogen peroxide wipes, or bleach wipes.

All methods reduced bacteria. But not to the levels of a new stethoscope, the study showed.

“Stethoscopes used in an ICU carry bacterial DNA reflecting complex microbial communities that include nosocomially important taxa. Commonly used cleaning practices reduce contamination but are only partially successful at modifying or eliminating these communities,” the researchers concluded in their paper.

Prior Studies to Find and Track Dangerous Bacteria

Studies tracking bacteria where people live, work, and travel are not new. For years, medical technologists and microbiologists have roamed the halls of hospitals and other clinical settings to swab and culture different surfaces and even articles of clothing. These efforts are often associated with programs to reduce nosocomial infections (HAIs).

One such study revealed that about 47% of neckties worn by clinicians carried HAIs, according to a New York Hospital Medical Center (now New York-Presbyterian Queens) study. Dark Daily reported on this finding 10 years ago. (See, “Antibiotic Neckties Are Latest Healthcare Fashion Trend,” May 25, 2007.)

And, on a larger scale, in 2013, researchers at Weill Cornell Medical College in New York City (NYC) used next-generation gene sequencing to track pathogens in the NYC subway system. The project, called PathoMap, involved collecting 1,404 surface samples from 468 NYC subway stations to develop a system for spotting and tracking potential microbial threat due to bioterrorism or emergent disease. (See, “Microbiologists at Weill Cornell Use Next-Generation Gene Sequencing to Map the Microbiome of New York City Subways,” December 13, 2013.)

This new study by UPenn Perelman School of Medicine researchers—published in a peer-reviewed medical journal—will hopefully serve as a contemporary reminder to doctors and other caregivers of how bacteria can be transmitted and the critical importance of cleanliness, not only of hands, but also stethoscopes (and neckties).  

Hospital-based medical laboratory leaders and microbiology professionals also can help by joining with their infection control colleagues to advocate for CDC-recommended disinfection and sterilization guidelines throughout their healthcare networks.

—Donna Marie Pocius

Related Information:

Molecular Analysis of Bacterial Contamination on Stethoscopes in an Intensive Care Unit

Stethoscopes Loaded with Bacteria, Including Staphylococcus

ICU Stethoscopes Teeming with Bacteria

Bacteria Remains After Cleaning Stethoscopes: Four Study Insights

Predictors of Heavy Stethoscope Contamination Following a Personal Examination

Centers for Disease Control and Prevention: Guidelines for Disinfection of Healthcare Equipment

Antibiotic Neckties are Latest Healthcare Fashion TrendMicrobiologists at Weill Cornell Use Next-Generation Gene Sequencing to Map the Microbiome of New York City Subways

FDA Authorizes 23andMe to Report Results of Direct-to-Consumer Pharmacogenetics Test to Customers without a Prescription, Bypassing Doctors and Clinical Laboratories

FDA cautions patients to not use data gained from the DTC test to make healthcare decisions on their own

Clinical laboratories continue to be impacted by the growing direct-to-consumer (DTC) testing market, as more walk-in lab customers order at-home tests. Now, the US Food and Drug Administration (FDA) has authorized a DTC test company to provide results of a pharmacogenetic (PGx) test to customers without needing a doctor’s order. This is the first genetic test of its kind to receive such FDA authorization and is in line with the government’s focus on precision medicine.

23andMe gained the authorization through the FDA’s de novo classification process, which the FDA uses to classify new devices that have no existing classification or comparabledevice on the market. 

“We’ve continued to innovate through the FDA and pioneer safe, effective pathways for consumers to directly access genetic health information,” said Anne Wojcicki, co-founder and CEO of 23andMe, in a news release. “Pharmacogenetic reports are an important category of information for consumers to get access to, and I believe this authorization opens the door for consumers to work with their health providers to better manage their medications.”

However, some experts caution that informing patients directly on how they metabolize medications based on genetic testing could encourage them to bypass physicians and medical laboratories in the decision-making process.

In a safety communication, the FDA alerted patients and healthcare providers that “claims for many genetic tests to predict a patient’s response to specific medications have not been reviewed by the FDA and may not have the scientific or clinical evidence to support this use for most medications. Changing drug treatment based on the results from such a genetic test could lead to inappropriate treatment decisions and potentially serious health consequences for the patient.”


Tim Stenzel, MD, PhD (above), Director, Office of In Vitro Diagnostics and Radiological Health at the FDA, told FierceBiotech, “This test should be used appropriately because it does not determine whether a medication is appropriate for a patient, does not provide medical advice, and does not diagnose any health conditions. Consumers should not use this test to make treatment decisions on their own.” (Photo copyright: LinkedIn.)

PGx Supports Precision Medicine

Pharmacogenetics (PGx) is the study of how genetic differences among individuals cause varied responses to certain drugs. Demand for PGx testing has increased exponentially as it becomes more valuable to consumers. It could provide a path to precision medicine treatment plans based on each patient’s genetic traits. And help determine which drug therapies and dosages may be optimal and which medicines should be avoided.  

“This test is a step forward in making information about genetic variants available directly to consumers and better inform their discussions with their healthcare providers,” Stenzel told FierceBiotech. “We know that consumers are increasingly interested in genetic information to help make decisions about their healthcare.”

The genes and their variants examined in the 23andMe PGx test are:

  • CYP2C19 *2, *3, *17;
  • CYP2C9 *2, *3, *5, *6, rs7089580;
  • CYP3A5 *3;
  • UGT1A1 *6, *28;
  • DPYD *2A, rs67376798;
  • TPMT *2, *3C;
  • SLCO1B1 *5; and,
  • CYP2D6 *2, *3, *4, *5, *6, *7, *8, *9, *10, *11, *15, *17, *20, *29, *35, *40, *41.

Hospitals Bring PGx Testing to Primary Care

Innovative hospital and health networks also are starting to make PGx tests available in primary care settings.

Sanford Imagenetics, part of the Sanford Health system, has produced a $49 laboratory-developed test (LDT) for genetic screening known as the Sanford Chip to help physicians select the most advantageous therapies for their patients. It uses a small amount of blood to identify patients’ risk for certain genetic diseases and determine which medications would be best for them. 

Sanford Health, headquartered in Sioux Falls, SD, is one of the largest health systems in the US with 44 hospitals, 1,400 physicians, and more than 200 senior care locations in 26 states and nine countries.

Geisinger Health, headquartered in Danville, PA, has initiated a pilot project based on PGx testing. The genetic sequencing data from 2,500 patients will be reviewed to determine if they are taking the best medication for their health conditions. Patients in need of changes to their prescriptions will be contacted by Geisinger pharmacists for recommendations.

As consumer demand for PGx testing increases, DTC customers will likely continue seeking new information about their genome. Clinical laboratories could play a role in interpreting that data and assisting pathologists and other healthcare providers determine the best drug therapies for optimal health outcomes.

—JP Schlingman

Related Information:

FDA Clears 23andMe’s DTC Drug Metabolism Test

FDA Clears the First Consumer Genetic Test for How Well Your Medications May Work—with Caveats

23andMe Granted the First and Only FDA Authorization for Direct-to-Consumer Pharmacogenetic Reports

Your Genes Can Show Us How Your Body Reacts to Drugs

Sales of Direct-to-Consumer Clinical Laboratory Genetic Tests Soar, as Members of Congress Debate How Patient Data should be Handled, Secured, and Kept Private

Balance Billing Under Increased Scrutiny at Both State and Federal Levels; Clinical Laboratory Tests Top List of Surprise Bills Received by Patients

Experts blame insurance regulators for not ensuring the adequacy of healthcare networks that include hospital-based physicians, such as pathologists and radiologists

According to a recent study, clinical laboratories, anatomic pathologists, radiologists, and anesthesiologists top the list of providers who bill patients for the difference between what they charge for their services and a hospital’s contracted reimbursement rates.

This so-called “balance-billing” not only causes hardship for patients and consumers already shouldering a larger portion of their healthcare costs, but poses a public relations concern for service providers across the US healthcare industry as well.

Following public outcry from patients who received care at what they believed to be in-network medical facilities, only then to be surprised by bills from their care providers for the remaining balance not covered by their insurance, the practice of balance billing has drawn increased scrutiny from state and federal officials.

Medical Laboratory Charges Top Reason for Surprise Bills

In August 2018, the National Opinion Research Center (NORC) at the University of Chicago interviewed 1,002 respondents age 18 and over about surprise medical bills.

In their report, NORC notes that of those surveyed, 57% (567 individuals) acknowledged receiving a surprise medical bill they thought would be covered by their health insurance.

When asked about the network status of the doctor who provided care during the episode related to the surprise bill, 79% responded that charges were not for doctors being out-of-network for their insurance plan. Medical laboratory-related charges were near the top of reasons patients received surprise bills, with 51% of individuals receiving bills related to “a laboratory test, like a blood test.”

Such surprise medical bills received frequent coverage in 2018. This has led many states to enact or discuss legislation to address the practice and offer cost protections for patients.

The Centers for Medicare and Medicaid Services (CMS) even included a Request for Information related to surprise billing and price transparency in their “Fiscal Year (FY) 2019 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Proposed Rule.”

Thus far, however, little change to existing regulations and contract systems has been enacted to protect patients or help laboratories and other service providers offer alternative payment solutions for patients.

There also are few requirements for insurance providers to verify that plans include sufficient numbers of in-network service providers when offering plans to consumers.

R-Bruce-Williams-MD-CAP-Geraldine-McGinty-MD
“Many news stories on ‘surprise’ billing blame physicians, because the bill is sent from the doctor’s office or billing company. But the insurance industry is the real culprit, in concert with insurance regulators who have not acted to require network adequacy,” R. Bruce Williams, MD (left), President, College of American Pathologists (CAP), and Geraldine B. McGinty, MD (right), Chair of the American College of Radiology Board of Chancellors, wrote in STAT. (Photos copyrights: College of American Pathologists/Geraldine McGinty.)

States Move to Change Trends While Patients Continue to Experience Bill Shock

States are beginning to address surprise billing concerns ahead of action by insurance regulators and the federal government. In December, the Arizona Department of Insurance issued a news release outlining the agency’s plan to allow for arbitration questions for surprise out-of-network bills.

And, California effectively banned out-of-network billing from groups within in-network facilities in 2017 with Assembly Bill 72. However, the state only finalized reimbursement rates for service providers and patients affected by surprise bills in January of this year according to Capital Public Radio.

Many of these state-level regulations do not account for the complexity of creating rules based on emergency or non-emergency care or the insurance providers in question. For example, Assembly Bill 72 does not apply to “Medicare, Medi-Cal, out-of-state plans, self-insured employer plans, or other products regulated by federal law,” according to a news release from the California Society of Anesthesiologists.

Finding Fair Solutions for Both Patients and Care Providers

Speaking with Kaiser Health News about a report of a man in Texas receiving a $109,000 surprise bill related to treatment after a heart attack, Rep. Lloyd Doggett of Texas said, “This is a nationwide problem, and we need a nationwide solution. We have a system where the patient, the most vulnerable person of all those involved, is caught between the insurer and the healthcare provider … these problems are solvable.”

Modern Healthcarerecently covered how some hospitals are now requiring physicians to go in-network as a provision of their contracts. However, they also note this approach disadvantages physicians and shifts reimbursement negotiation power to insurers. Should hospitals take a similar approach with medical laboratory specialists, it could create similar concerns.

While surprise medical bills create added hardship for patients and pose reputational and reimbursement concerns for clinical laboratories and healthcare providers, creating regulations that establish effective protections while also protecting the financials of service providers continues to prove difficult.

Speaking with Modern Healthcare, Dan Sacco, Vice President for Strategic Affairs and Payer Relations at Boca Raton Regional Hospital, summarized concerns concisely, saying, “We’re trying to protect [consumers], but we’re also trying to be reasonable business partners as well.”

—Jon Stone

Related Information:

Surprise Out-of-Network Bills Are the Fault of Insurance Regulators

Hospitals’ Solution to Surprise Out-of-Network Bills: Make Physicians Go In-Network

Letter from AHA and FAH to Congress

NORC AmeriSpeak Omnibus Survey: Surprise Medical Bills

Arizona Department of Insurance: Arbitration for Surprise Healthcare Bills Will Be Available Soon

New Payment Model Tackles “Surprise Medical Bill” Issue

AB 72 Implementation: What You Need to Know

The $109K Heart Attack Bill Is Down to $332. What about Other Surprise Bills?

Taking Surprise Medical Bills to Court

Surprise Medical Bills Loom for Millions of Americans in 2019

Fiscal Year (FY) 2019 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) Prospective Payment System Proposed Rule, and Request for Information

AB 72: What the New “Out-of-Network” Law Means

Independent Clinical Laboratories in Maryland May Need to Step-up Outreach with Hospitals as New CMS Program Launches Jan. 1

Clinical laboratory leaders will want to pay close attention to a significant development in Maryland. The state’s All-Payer Medicare program—the nation’s only all-payer hospital rate regulation system—is broadening in scope to include outpatient services starting Jan. 1. The expanded program could impact independent medical laboratories, according to the Maryland Hospital Association (MHA), which told Dark Daily that those labs may see hospitals reaching out to them.

The Centers for Medicare and Medicaid Services (CMS) and the state of Maryland expect to save $1 billion by 2023 in expanding Maryland’s existing All-Payer Model—which focused only on inpatient services since 2014—to also include primary care physicians, skilled nursing facilities, independent clinical laboratories, and more non-hospital settings, according to a CMS statement.

Healthcare Finance notes that it represents “the first time, CMS is holding a state fully at risk for the total cost of care for Medicare beneficiaries.”

Value of Precision Medicine and Coordination of Care to Clinical Labs

“If a patient receives care at a [medical] laboratory outside of a hospital, Maryland hospitals would be looking at ways to coordinate the sharing of that freestanding laboratory information, so that the hospital can coordinate the care of that patient both within and outside the hospital setting,” Erin Cunningham, Communications Manager at MHA, told Dark Daily. Such a coordinating of efforts and sharing of clinical laboratory patient data should help promote precision medicine goals for patients engaged with physicians throughout Maryland’s healthcare networks.

The test of the new program—called the Total Cost of Care (TCOC) Model—also could be an indication that Medicare officials are intent on moving both inpatient and outpatient healthcare providers away from reimbursements based on fees-for-services.

CMS and the state of Maryland said TCOC gives diverse providers incentives to coordinate, center on patients, and save Medicare per capita costs of care each year.

“What they are really doing is tracking how effective we are at managing the quality and the costs of those particular patients that are managed by the physicians and the hospitals together,” Kevin Kelbly, VP and Chief Financial Officer at Carroll Hospital in Westminster, told the Carroll County Times. “They will have set up certain parameters. If we hit those parameters, there could be a shared savings opportunity between the hospitals and the providers,” he added. (Photo copyright: LifeBridge Health.)

The TCOC runs from 2019 through 2023, when it may be extended by officials for an additional five years.

How Does it Work?

The TCOC Model, like the earlier All-Payer Model, will limit Medicare’s costs in Maryland through a per capita, population-based payment, Healthcare Finance explained.

It includes three programs, including the:

  • Maryland Primary Care Program (MDPCP), designed to incentivize physician practices by giving additional per beneficiary, per month CMS payments, and incentives for physicians to reduce the number of patients hospitalize;
  • Care Redesign Program (CRP), which is a way for hospitals to make incentive payments to their partners in care. In essence, rewards may be given to providers that work efficiently with the hospital to improve quality of services; and,
  • Hospital Payment Program, a population-based payment model that reimburses Maryland hospitals annually for hospital services. CMS provides financial incentives to hospitals that succeed in value-based care and reducing unnecessary hospitalizations and readmissions.

CMS and Maryland officials also identified these six high-priority areas for population health improvement:

  • Substance-use disorder;
  • Diabetes;
  • Hypertension;
  • Obesity;
  • Smoking; and
  • Asthma.

“We are going to save about a billion dollars over the next five years, but we are also providing better quality healthcare. So it’s going to affect real people in Maryland, and it helps us keep the whole healthcare system from collapsing, quite frankly,” Maryland Gov. Larry Hogan, told the Carroll County Times.

OneCare in Vermont, Different Approach to One Payer

Maryland is not the only state to try an all-payer model. Vermont’s OneCare is a statewide accountable care organization (ACO) model involving the state’s largest payers: Medicare, Medicaid, and Blue Cross and Blue Shield of Vermont, Healthcare Dive pointed out. The program aims to increase the number of patients under risk-based contracting and, simultaneously, encourage providers to meet population health goals, a Commonwealth Fund report noted.

Both Maryland’s and Vermont’s efforts indicate that payment plans which include value-based incentives are no longer just theory. In some markets, fees-for-service payment models may be gone for good.

Clinical laboratory leaders may want to touch base with their colleagues in Maryland and Vermont to learn how labs in those states are engaging providers and performing under payment programs that, if successful, could replace existing Medicare payment models in other states.

—Donna Marie Pocius

 

Related Information:

Maryland’s Total Cost of Care Model

Maryland All-Payer Model Expands to Include Outpatient Services

Gov. Hogan Sees Maryland Model as Example for U.S. Healthcare

The Maryland Model

Gov. Larry Hogan, Federal Government Sign Maryland Model All-Payer Contract

CMS Expands Maryland’s All-Payer Program to Outpatient Services

Vermont’s Bold Experiment in Community Driven Healthcare Reform

Excessive $48,329 Charge for California Patient’s Outpatient Clinical Laboratory Testing Calls Attention to Chargemaster Rates and New CMS Price Transparency Rule

Studies show medical laboratories may be particularly hit by adjustments to hospital chargemasters as hospitals prepare to comply with Medicare’s New Transparency Rule

Recently, Kaiser Health News (KHN) published a story about a $48,329 bill for allergy testing that cast a spotlight on hospital chargemaster rates just as healthcare providers are preparing to publish their prices online to comply with a new Centers for Medicare and Medicaid Services (CMS) rule aimed at increasing pricing transparency in healthcare. The rule goes into effect January 1, 2019.

The patient—a Eureka, Calif., resident with a persistent rash—had received an invoice for more than $3000 from her in-network provider.

Though this type of allergy skin-patch testing is usually performed in an outpatient setting by a trained professional, such as an allergist or dermatologist, the patient elected to have the testing performed at Stanford Health Care (Stanford), a respected academic medical system with multiple hospitals, outpatient services, and physician practices.

The patient’s insurance plan, Anthem Blue Cross (Anthem), paid $11,376 of the $48,329 amount billed by Stanford Health Care, which was the rate negotiated between the insurer and Stanford, Becker’s Healthcare reported. The patient ultimately paid $1,561 out-of-pocket.

So, where did that $48,329 in total charges come from? Experts pointed to the provider’s chargemaster. A chargemaster (AKA, charge description master or CDM) lists a hospital’s prices for services, suppliers and procedures, and is used by providers to create a patient’s bill, according to California’s Office of Statewide Health Planning and Development (OSHPD).

Chargemasters note high prices beyond hospitals’ costs and may be considered jumping off points for hospitals to use in invoicing payers and patients, RevCycleIntelligence explained.

Hospital representatives will negotiate with insurance companies, asking them to pay a discounted rate off the chargemaster list. A patient with health insurance accesses care at that negotiated rate and perhaps has responsibility for a share of that amount as well.

However, an out-of-network patient, uninsured person, or cash customer who receives care will likely be billed the full chargemaster rate.

In a statement to KHN, Stanford explained that the California woman’s care was customized and, therefore, costly: “We conducted a comprehensive evaluation of the patient and her environmental exposures and meticulously selected appropriate allergens, which required obtaining and preparing putative allergens on an individual basis.”

Johns Hopkins researchers Ge Bai, PhD, CPA (left), and Gerard Anderson, PhD (right), authored a study published in Health Affairs that shows “Hospitals on average charged more than 20 times their own costs in 2013 in their CT scan and anesthesiology departments.” Hospitals with clinical laboratory outreach programs will want to consider how their patients may respond as new federal price transparency requirements make it easier for patients to see medical laboratory test prices in advance of service. (Photo copyright: Johns Hopkins University.)

Now is a Good Time for Clinical Laboratories to Make Chargemaster Changes

Some organizations, such as the Healthcare Financial Management Association (HFMA), are calling for chargemaster adjustments as part of a comprehensive plan to improve transparency and lower healthcare costs. This falls in line with the new CMS rule requiring hospitals to post prices online starting Jan.1, 2019.

In fact, hospital medical laboratories, which cannot distinguish their services from competitors, may be impacted by the new CMS rule perhaps more than other services, the HFMA analysis warned.

“The initial impact for healthcare organizations, if they have not already experienced it, will be on commoditized services such as [clinical] lab and imaging. Consumers do not differentiate between high and low quality on a commoditized service the same way a physician might, which means cost plays a larger role in consumers’ decision making.” That’s according to Nicholas Malenka, Senior Consultant, GE Healthcare Partners, and author of the HFMA report. He advises providers to do chargemaster adjustments that relate charges to costs of services, competitors’ charges, and national data.

Medical laboratory leaders also may want to take another look at the opportunities and risks for labs suggested in an earlier Dark Daily e-briefing on the Medicare requirement. (See, “Latest Push by CMS for Increased Price Transparency Highlights Opportunities and Risks for Clinical Laboratories, Pathology Groups,” August 8, 2018.)

Are Chargemaster Charges Truly Excessive? Johns Hopkins Researchers Say ‘Yes!’

Most hospitals with 50 beds or more have a charge-to-cost ratio of 4.32. In other words, $432 is charged when the actual cost of a service is $100, according a study conducted by Johns Hopkins University and published in Health Affairs.

The researchers also noted in a news release about their findings titled, “Hospitals Charge More than 20 Times Cost on Some Procedures to Maximize Revenue,” that:

  • Charge-to-cost ratios range from 1.8 for routine inpatient care to 28.5 for a CT scan; and,
  • Hospitals with $100 in CT costs may charge an uninsured patient or out-of-network patient $2,850 for the service.

“Hospitals apparently markup higher in the departments with more complex services because it is more difficult for patients to compare prices in these departments,” lead author Ge Bai, PhD, CPA, Associate Professor at Johns Hopkins Carey Business School, noted in the news release.

“(The bills for high charges) affect uninsured and out-of-network patients, auto insurers, and casualty and workers’ compensation insurers. The high charges have led to personal bankruptcy, avoidance of needed medical services, and much higher insurance premiums,” co-author Gerard Anderson, PhD, Professor of Health Policy and Management at Johns Hopkins Bloomberg School of Public Health, stated in the news release.

Legal Issues Possible for Hospitals, Medical Laboratories, Other Providers

Still another study published in the American Journal of Managed Care (AJMC) explored the legality of “surprising” uninsured and out-of-network patients with bills at the chargemaster rates. It found that contract law supports market-negotiated rates—not chargemaster rates that do not reflect actual costs or the market.

“Patients and payers should know that they are under no obligation to pay surprise bills containing chargemaster rates, and state attorneys generally can use the law to prevent providers from pursing chargemaster-related collection efforts against patients,” the researchers wrote.

Labs Need to Get Involved

Clinical laboratory leaders in hospitals and health systems are advised to reach out to hospital chargemaster coordinators to ensure the chargemaster, as it relates to the lab, is inclusive, accurate, and in sync with competitive market data. Independent medical laboratories may want to similarly check their chargemasters to see how their lab test prices compare to the prices charged by other labs serving the same community.

—Donna Marie Pocius

Related Information:

That’s a Lot of Scratch: The $48,329 Allergy Test

Allergy Tests

Six Things to Know About a Woman’s $48K Allergy Test

The Role of the Hospital Chargemaster in Revenue Cycle Management

Why Your Access Strategy Demands Pricing Transparency

CMS Proposes Changes to Empower Patients and Reduce Administrative Burden

US Hospitals Are Still Using Chargemaster Markups to Maximize Revenue

Hospitals Charge More than 20 Times Costs on Some Procedures to Maximize Revenue

Battling the Chargemaster: A Simple Remedy to Balance Billing for Unavoidable Out-of-Network Care

Latest Push by CMS for Increased Price Transparency Highlights Opportunities and Risks for Clinical Laboratories and Pathology Groups

 

;