We see cases of this all the time. The same procedure is performed at two different locations (sometimes within just a few miles of each other), but the health claim charges are outrageously different. It’s the result of the tremendous lack of transparency in health care.
Unfortunately, this pricing variation can occur with any kind of surgery, lab testing or imaging procedure, but it’s often much more prominent with diagnostic tests like MRIs. Yes, the cost of an MRI can differ considerably depending on the location of the scan – from knee to shoulder to brain. But if it’s the same type of image being captured from facility to facility with similar equipment used, the costs shouldn’t be so diverse, should they?
The transparency problem stems from the fact that providers and facilities can set their own prices for care. Some will take Medicare Reimbursement rates into account while others charge based on their own formula. I came across an article last year that really puts the disparity into perspective.
According to the piece in USA Today, the price for the same MRI (lower back scan without dye) ranges anywhere from $475 to $6,221 within 100 miles of San Francisco. Imagine how frustrated you would feel if you found out the MRI you received could have cost almost $5,750 less if you traveled just a few cities over.
This is why Cypress and so many other third party administrators (TPAs) recommend incorporating a benefits solution that helps plan members price-comparison shop by health care procedure. With a service like this, consumers can see the variations in cost right up front and make more informed decisions. It can be a real difference-maker because excessive charges at the individual level ultimately translate to higher rates for all.
The problem of two drastically different charges for an MRI (or any health care service!) may not be going away anytime soon, but employers can take steps to ensure that they’re not on the receiving end of the sky-high variety.