The Reality of Commercial Payer-Negotiated Rates in Cleft Lip and Palate Repair

Abstract

Background:

Commercial payer-negotiated rates for cleft lip and palate surgery have not been evaluated on a national scale. The aim of this study was to characterize commercial rates for cleft care, both in terms of nationwide variation and in relation to Medicaid rates.

Methods:

A cross-sectional analysis was performed of 2021 hospital pricing data from Turquoise Health, a data service platform that aggregates hospital price disclosures. The data were queried by CPT code to identify 20 cleft surgical services. Within- and across-hospital ratios were calculated per CPT code to quantify commercial rate variation. Generalized linear models were used to assess the relationship between median commercial rate and facility-level variables and between commercial and Medicaid rates.

Results:

There were 80,710 unique commercial rates from 792 hospitals. Within-hospital ratios for commercial rates ranged from 2.0 to 2.9 and across-hospital ratios ranged from 5.4 to 13.7. Median commercial rates per facility were higher than Medicaid rates for primary cleft lip and palate repair ($5492.20 versus $1739.00), secondary cleft lip and palate repair ($5429.10 versus $1917.00), and cleft rhinoplasty ($6001.00 versus $1917.00; P< 0.001). Lower commercial rates were associated with hospitals that were smaller ( P< 0.001), safety-net ( P< 0.001), and nonprofit ( P< 0.001). Medicaid rate was positively associated with commercial rate ( P< 0.001).

Conclusions:

Commercial rates for cleft surgical care demonstrated marked variation within and across hospitals, and were lower for small, safety-net, or nonprofit hospitals. Lower Medicaid rates were not associated with higher commercial rates, suggesting that hospitals did not use cost-shifting to compensate for budget shortfalls resulting from poor Medicaid reimbursement.