Study: Hospital prices for radiology services 2 to 6 times higher than Medicare rates

A new study indicates that the median commercial negotiated prices for 13 common shoppable hospital radiology services were about two to six times higher than the rates set by Medicare.

Researchers at Johns Hopkins University and Michigan State University reviewed data this year from approximately 2,000 U.S. hospitals that disclosed pricing information. Price differences ranged from 2.2 times higher for mammography of both breasts ($289 median commercial price vs. $129 Medicare rate) to 5.9 times higher for a CT scan of the head or brain without contrast ($813 median commercial price vs. $137 Medicare rate).

The findings were published Nov. 30 in Radiology.

Other notably high price differences included an MRI scan of the lower spinal canal ($1,311 commercial vs. $269 Medicare, or 4.9 times higher); a CT scan of the pelvis with contrast ($1,079 commercial vs. $221 Medicare, also 4.9 times higher); and an MRI scan of a leg joint ($1,276 commercial vs. $267 Medicare, or 4.8 times higher).

Among the 13 hospital radiology services, the highest median commercial price was $1,788 for an MRI scan of the brain before and after contrast, which was 4.0 times higher than the Medicare rate of $446 for the same service. Not far behind was the median commercial price of $1,654 for a CT scan of the abdomen and pelvis with contrast, which was 3.8 times higher than the Medicare rate of $431 for the same service.

The study’s data came from hospitals that disclosed commercial negotiated prices for at least one of the 13 radiology services, as required under the Hospital Price Transparency Final Rule of the federal Centers for Medicare and Medicaid Services. The rule took effect Jan. 1, 2021. But as of September 6, only about one-third of hospitals disclosed their commercial prices for these common shoppable radiology services, according to the Johns Hopkins Carey Business School.

“Gaining this kind of detailed knowledge of hospital commercial pricing makes it possible for payers and patients to shop for hospital care,” Ge Bai, a professor at the Johns Hopkins Carey Business School and the study’s senior author, said in a statement. “No longer blindfolded, payers and patients can identify more affordable hospitals for these routine imaging services.”

“By reporting the significant price disparities among shoppable services, our research will empower employers, payers, and patients to demand changes,” added co-author John (Xuefeng) Jiang, a professor at Michigan State University’s Broad College of Business. “It also confirms policymakers’ concern that lack of transparency has hidden potentially abusive price behaviors.” Howard P. Forman, a professor of diagnostic radiology, public health, economics, and management at Yale University, writing in Radiology, called the study results “at once unsurprising and startling” — noting that price transparency has always been a challenge.

“Radiologists can do little to encourage or to force compliance by hospitals,” he wrote. “There are some radiologists who play leadership roles in their health systems and can advocate for transparency. Still, this area of compliance is firmly in the hands of the hospitals and health systems, and not within the control of individual radiologists or department or group leadership.”

This research was supported by Arnold Ventures, a private investment fund that specializes in health care, education, criminal justice, and public finance.