Hospital Price Transparency Data Reveal Up to 8-Fold Geographic Variation in Commercial Rates for IR Procedures

This study analyzes hospital price transparency data to reveal substantial geographic variation in commercial rates for interventional radiology procedures, with rates varying up to 8-fold across states and consistently lower in rural areas compared to urban ones.

The Gist

The Big Picture: A Price Tag Mystery

Imagine you walk into a grocery store to buy a loaf of bread. In one town, it costs $2. In a town just 100 miles away, the exact same loaf costs $16. You'd be shocked, right?

This paper investigates a similar mystery, but instead of bread, it looks at 14 common medical procedures performed by Interventional Radiologists (doctors who use imaging to fix problems inside the body without big cuts). The researchers wanted to see how much the "sticker price" for these procedures varies across the United States when paid for by private insurance companies.

The Main Findings

1. The Price Tags Vary Wildly (The "8-Fold" Difference)
The study found that the price for the same procedure can vary by up to 8 times depending on which state you are in.

• The Analogy: Think of it like buying a car. In some states, a specific model might cost $20,000. In other states, the exact same model from the same manufacturer might cost $160,000.
• The Reality: For procedures like opening up a blocked leg artery (angioplasty), the price in the most expensive state was 8.3 times higher than in the cheapest state.

2. The "Rural Discount" (The Country vs. City)
The researchers discovered a clear pattern: The more rural a state is, the cheaper the procedures tend to be.

• The Analogy: Imagine a pizza chain. In a bustling, crowded city center where everyone wants pizza, the price is high. In a quiet, small town where there are fewer customers, the price is lower.
• The Reality: States with the highest percentage of rural populations had prices that were, on average, 42% lower than the most urban states. It's as if the "city tax" is built into the medical bill.

3. The "Big Chain" Effect (Uniform Pricing)
The study found that many large hospital systems act like a single giant store. If a hospital system owns 10 different hospitals in a state, they often charge the exact same price at all 10 locations, regardless of whether one is a massive city hospital and the other is a small community clinic.

• The Analogy: Think of a national coffee chain. Whether you buy a latte at a fancy downtown branch or a small roadside stop, the price on the menu is identical. The researchers found that 660 groups of hospitals were doing this with medical procedures.

4. Private Insurance vs. Medicare (The "Floor" vs. the "Ceiling")
The researchers compared what private insurance pays to what the government (Medicare) pays.

• The Analogy: Imagine Medicare sets a "floor" price for a service (the minimum the hospital must accept). Private insurance companies often pay much more than this floor.
• The Reality: For many procedures, private insurance paid 1.3 to 3.6 times more than the government rate. For a procedure called "paracentesis" (draining fluid from the belly), private insurance paid 3.6 times what Medicare paid.

What the Paper Does NOT Say

It is important to know what this study doesn't tell us:

• It's not about the doctor's paycheck: The prices analyzed are what the hospital gets paid for the room, the equipment, and the staff. It does not reflect how much the actual doctor (the interventional radiologist) earns. Doctors are paid separately, and their pay doesn't vary as wildly as the hospital fees.
• It's not about what you pay out of pocket: These are the "negotiated rates" between hospitals and insurance companies. What a specific patient pays depends on their specific insurance plan (deductibles, co-pays), which isn't shown here.
• It's not a "Good" or "Bad" judgment: The authors are just showing the map of the prices. They aren't saying the high prices are "wrong" or the low prices are "too low." They are simply saying, "Look how different the map looks."

Why This Matters

The authors believe that making these prices visible is like turning on the lights in a dark room. For years, these prices were hidden behind closed doors. Now that we can see them, patients, employers, and policymakers can see that:

1. Where you live drastically changes the cost of care.
2. Big hospital chains often charge the same price everywhere they operate.
3. Private insurance often pays significantly more than the government does for the same service.

The paper concludes that this transparency is the first step toward making smarter choices about healthcare, but it stops short of telling people exactly what to do with that information.

Technical Summary

Technical Summary: Hospital Price Transparency Data Reveal Up to 8-Fold Geographic Variation in Commercial Rates for IR Procedures

Problem Statement
Despite the 2021 CMS Hospital Price Transparency Final Rule (45 CFR Part 180), which mandated the publication of Machine-Readable Files (MRFs) listing standard charges, comprehensive analyses of commercially negotiated rates specifically for interventional radiology (IR) procedures have remained limited. While prior studies have identified wide variation in surgical and medical procedure pricing, the specific magnitude and geographic distribution of commercial facility rates for common IR procedures—spanning image-guided drainage, embolization, peripheral vascular intervention, and spine procedures—were not fully characterized. Furthermore, the relationship between these commercial rates and state-level population characteristics, such as rurality, and the prevalence of rate uniformity within multi-facility health systems required further investigation.

Methodology
This study is a cross-sectional observational analysis utilizing publicly posted U.S. hospital MRFs. The authors curated data from CenterIQ, a database that standardizes negotiated commercial facility rates at the payer-arrangement level and aggregates them to per-hospital median rates per Current Procedural Terminology (CPT) code.

• Procedure Selection: Fourteen common IR procedures were selected to represent major practice categories. Two image-guidance add-on codes were excluded from the primary analysis due to likely posting heterogeneity.
• Data Processing and Deduplication: To prevent inflation of variation estimates caused by multi-facility reporting from the same health system, the authors deduplicated data at the "state-CPT" level. Rows sharing identical rate medians, ranges, and payer counts were collapsed into a single observation. This treated each distinct negotiated commercial rate as one observation, regardless of the number of affiliated facilities posting it.
• Filtering: Outliers were excluded using absolute bounds (<$25 or >$250,000) and code-relative bounds (0.25× to 6.0× the CY 2026 CMS Outpatient Prospective Payment System [OPPS] facility payment). Hawaii was excluded due to atypical hospital structure and low reporting volume.
• Comparators: Commercial rates were compared against CY 2026 CMS OPPS facility payments. Relationships with population rurality were assessed using 2020 U.S. Census data.
• Scope: The analysis focused strictly on commercial facility (technical) payments, explicitly excluding physician professional fees.

Key Contributions
The paper provides the first deduplicated, hospital-system-weighted analysis of commercial facility rates for a broad set of IR procedures. Its primary contributions include:

1. Quantification of Geographic Variation: Establishing the fold-difference between the highest and lowest-priced states for 14 specific IR codes.
2. Rurality Correlation: Systematically assessing the correlation between state-level commercial rates and the percentage of rural population.
3. Within-System Uniformity: Characterizing the prevalence of identical negotiated rates across multiple facilities within the same health system.
4. Commercial-to-Medicare Ratios: Comparing commercial medians to stable CMS OPPS reference rates to determine the commercial premium.

Results

• Geographic Variation: Across the 14 procedures, state-level commercial median rates varied significantly. The highest-state-to-lowest-state ratios ranged from 3.7-fold (tunneled port placement, CPT 36561) to 8.3-fold (fem-pop angioplasty, CPT 37224).
  • Highest rates were frequently anchored in Pennsylvania, Indiana, New Jersey, Florida, and California.
  • Lowest rates were frequently anchored in Maine, North Dakota, Utah, New Hampshire, and South Carolina.
• Rurality Correlation: A consistent negative relationship was observed between state percent-rural population and median commercial rates. The mean Spearman rank correlation ($\rho$) was −0.46 (range −0.33 to −0.80) across all 14 codes. The most-rural quartile of states had median commercial rates 42% lower than the most-urban quartile.
• Within-System Uniformity: Deduplication identified 660 multi-facility groups where a single negotiated rate was applied across two or more affiliated hospitals within a state. This pattern was observed in every state with sufficient reporting, indicating that regional health systems often apply uniform rates across diverse facility types (e.g., academic centers and community hospitals).
• Commercial vs. Medicare: For the 8 procedures with available CY 2026 OPPS rates, national median commercial rates ranged from 1.34× (non-tumor embolization) to 3.60× (paracentesis) the corresponding CMS facility payment.

Significance and Claims
The authors state that their purpose is strictly descriptive: to make the variation in commercial rates visible and characterize its patterns without inferring specific cost structures or policy implications.

• Market Structure: The findings support prior literature linking commercial pricing to market structure, suggesting that concentrated regional health networks possess negotiating leverage that results in higher rates, while less consolidated or more rural markets show lower rates.
• Transparency as a Precondition: The paper argues that these findings underscore the necessity of continued investment in price transparency. Only with visible data can patients, employers, payers, and clinicians make informed decisions regarding care settings and value-based contracting.
• Limitations of Interpretation: The authors explicitly caution that these rates represent negotiated facility payments, not final patient costs or physician earnings. They note that the data does not prove prices are "too high" or "too low," but rather reveals the complexity of the current reimbursement landscape where commercial rates often persist based on historical bargaining rather than current costs.