Private insurers generally pay physicians higher rates than Medicare does for the same service but some specialties are winning out with significant commercial markups.
Specialties such as cardiology and anesthesiology got between 120% to 330% more in commercial plan payments than Medicare rates, but other specialties such as dermatology and obstetrics get less, a new study found.
The study released Monday by the Urban Institute explored the markups specialties get from commercial plans compared to traditional Medicare rates. The analysis comes as some in Congress have explored ways to reduce commercial prices by benchmarking private rates, which, if enacted, could have a varied effect based on the specialty of the physician.
But the study also suggests that the "payment disparity between primary care and other specialties, a long-standing concern in Medicare, is likely even wider in commercial insurance,” the Urban Institute said in a release. “Narrowing that disparity, improving access to primary care, and reducing health system costs will therefore require physician payment reforms aimed at all payers.”
Urban looked at data from FAIR Health’s private insurance claims database from March 2019 to February 2020. It included 17 physician specialties that represent 40% of total professional spending.
The study found ten specialties that received payments from commercial plans that were 120% to 330% higher than Medicare rates on average.
Those specialties were:
- Gastroenterology: 120%
- Internal medicine: 120%
- Cardiology: 130%
- General surgery: 140%
- Surgery and radiation oncology: 140%
- Orthopedics: 150%
- Radiology: 180%
- Neurosurgery: 220%
- Emergency and critical care: 250%
- Anesthesia: 330%
Dermatology commercial payments were about 90% of Medicare prices, the lowest of the 17 specialties that were analyzed. Psychiatry, ophthalmology, obstetrics and family medicine got 110% more than Medicare.
The analysis comes as some in Congress have sought to use Medicare rates as a benchmark for commercial payments as a way to rein in healthcare spending.
“This analysis finds that only a small number of physician specialties receive commercial markups over Medicare payment rates above 150%,” Urban said. “These specialties would face the largest income losses if forced to accept Medicare rates from private payers.”
But Urban cautioned that any concern about payment cuts needs to also consider the total physician compensation.
“Specialties with the largest potential payment reductions also have high baseline compensation, ranging from about $350,000 a year for emergency physicians to more than $800,000 a year for neurosurgeons,” the study said.
Other analyses have found a greater gap between commercial and Medicare rates for other types of healthcare services. For instance, Medicare rates for all hospital services ranged from 141% to 259% of the Medicare rates, according to a review from the Kaiser Family Foundation.