Safety Net Hospitals Are Reimbursed Significantly Less for Common Otolaryngology Procedures

Introduction: Otolaryngology care for the underinsured is often provided at Safety Net Hospitals (SNH). To maintain access to essential otolaryngology services, SNHs may find additional income by negotiating higher prices with private insurers.

Methods: The Hospital Price Transparency Rule requires hospitals to publicly disclose negotiated prices with commercial insurers. We linked prices for 17 high volume otolaryngology procedures to the 2024 Hospital Cost Tool from the National Association of State Policy, which documents annual clinical utilization by patient insurance status. A hospital is identified as a SNH if it is in the top state quartile for uninsured care. We utilized a cross-sectional, risk-adjusted, multivariable generalized linear model to assess for variation in prices for otolaryngology procedures and for differences in reimbursement across payers for SNHs and non-SNHs.

Results: 1,586,820 prices were reported across the 17 otolaryngology procedures by 724 SNHs and 3,744 non-SNHs . The most commonly reported procedure was nasal/sinus endoscopy (n=119,526; CPT 31237) and least commonly was cervical lymphadenectomy (n=50,066; CPT 38724). Prices for otolaryngology procedures varied substantially within and across hospitals (e.g. prices varied, on average, 24-fold across hospitals and 8-fold within hospitals for tonsillectomy (CPT 42820)).

Across all otolaryngology procedures, SNHs were reimbursed a mean 15.9% less by commercial insurers ($4,487vs$5,339;p <.01) and 18.3% less for marketplace plans ($3,346vs$4,095;p <.01) compared to non-SNHs, without a significant difference for Medicare Advantage ($3,003vs$3,124;p=0.44) and Managed Medicaid ($1,773vs$1,705;p=0.51).

Conclusions: Our investigation demonstrates for otolaryngology care that safety net hospitals are “doubly disadvantaged”: receiving less revenue by caring for more uninsured patients and receiving lower reimbursement by private insurers. Taken together, these findings are concerning for the viability of SNHs facing anticipated rises in uncompensated care.