July 5, 2017

CT hospital outpatient payments fell 14% in 2015 after policy change, report finds

The average hospital outpatient payment per surgery decreased in Connecticut by about 14 percent from 2014 to 2015 after the state adopted a fee schedule for hospital and ambulatory surgery centers (ASCs), according to a new study from the Cambridge, Mass.-based Workers Compensation Research Institute.

In other states, hospital payments fell 1 percent.

Connecticut in April 2015 adopted a fee schedule setting the hospital outpatient reimbursement rate at 210 percent of the Medicare rate, according to the study, which benchmarks hospital payments for a group of common outpatient surgeries in workers' compensation across 35 states and represent 88 percent of workers' comp benefits paid in the U.S.

The study, Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 6th Edition, found hospital outpatient payments were higher and growing faster in states with percent-of-charge-based fee regulations or no fee schedules. States with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules -- 37 to 151 percent higher than the median of the study states with fixed-amount fee schedules in 2015.

States with no fee schedules also had higher hospital outpatient payments per episode -- 44 to 136 percent higher than the median of the study states with fixed-amount fee schedules in 2015.

Connecticut was a nonfee schedule state before the 2015 change, which did not take effect until the second quarter, so the 14 percent reduction in hospital payments does not reflect the full effect of the new fee schedule, which study authors plan to monitor in future reports.

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