Price Transparency for Prostate Cancer Radiation Therapy at National Cancer Institute–Designated Cancer Centers (2024)

Key Points

Question Does the US Centers for Medicare & Medicaid Services January 2019 price transparency rule allow patients to compare prices of radiation therapy at National Cancer Institute–designated cancer centers?

Findings In this economic evaluation of publicly available chargemasters at 52 hospitals, a 21.7-fold difference in price was found between the least and most expensive hospital. Procedure descriptions were inconsistent, and the mean price was 10.1 times the price paid by Medicare.

Meaning There is wide variation in the price of radiation treatment, but the complexity of chargemaster information and the unclear association between price and patient cost make the value of the information for patients questionable.

Importance A January 2019 price transparency mandate by the US Centers for Medicare & Medicaid Services (CMS) allows patients to look up the prices of cancer treatment services at hospitals across the United States.

Objective To investigate the value of the CMS price transparency rule in allowing patients with prostate cancer to comparison shop by price for radiation treatment services among National Cancer Institute–designated cancer centers.

Design, Setting, and Participants We identified the February 2019 publicly available price-containing chargemasters for National Cancer Institute–designated cancer centers. We isolated the charge per fraction of intensity-modulated radiation therapy used in standard prostate radiation treatment. We then calculated the mean (SD) charges of a 28-fraction course of prostate irradiation at all included hospitals. No human participants were included in this study.

Main Outcomes and Measures We analyzed the degree of price variation, the association of the mean price to the price paid by Medicare, and the association of the prices with the practice expense geographic practice cost index, as determined by Medicare.

Results Of the 63 designated hospitals, 52 (84%) listed a price for simple intensity-modulated radiation therapy that is associated with standard prostate cancer radiation treatment. For a standard 28-fraction treatment, the charges ranged from $18 368 to $399 056, with a mean of $111 728.80 (10.1 times the price paid by Medicare). There was a weak positive association between price and geographic practice cost index, with an r² value of 0.13 (P = .008).

Conclusions and Relevance The availability of CMS-mandated hospital chargemasters and the descriptors used for simple intensity-modulated radiation therapy are not uniform, and the listed charges are highly variable. The association between listed charges and actual prices paid by patients or insurers is unclear, mitigating the value of the CMS rule for patients with prostate cancer who are receiving radiation therapy. This study suggests that implementation of the CMS price transparency policy may be insufficient to enable patients to estimate or compare prices for prostate cancer radiation treatment.

One in 3 Americans experience financial distress as a result of medical care, and patients with cancer are twice as likely to file for bankruptcy as patients without cancer.^1-3 Price transparency has been proposed as one of the potential solutions to high-cost care by empowering patients to budget for expected costs, apply for financial assistance earlier in their treatment course when required, engage in shared decision-making with their physicians around costs, and comparison shop across facilities.⁴

The US Centers for Medicare & Medicaid Services (CMS) recently finalized a rule that required all hospitals to publicly publish their chargemasters, the standard prices for all hospital services and procedures, by January 2019. The stated goal was to encourage “consumer friendly communication”⁵ to help patients understand their financial liability and “enable patients to compare charges…across hospitals.”⁵

Chargemaster list prices have previously been criticized for having little correlation to the final payer-negotiated payments or costs to patients.^6,7 We investigated the value of this new mandate to allow patients with cancer to conduct comparison shopping among National Cancer Institute (NCI)–designated cancer centers. Specifically, we examined the variability in charges in intensity modulated radiation therapy (IMRT) for a patient with prostate cancer.

We identified all 63 NCI-designated cancer centers, excluding the 7 basic laboratory cancer centers that do not offer clinical services. We searched the website of each hospital for their publicly listed chargemaster in February 2019. Search terms used to find the chargemaster included billing, price, cost, and chargemaster. We used Current Procedural Terminology code 77385 (also referred to as G6015), which refers to the charge per fraction of simple IMRT delivery for prostate cancer, as the reference code to determine relative price. The delivery portion of radiation therapy typically constitutes 50% to 75% of the total price of radiation treatment.⁸ If the Current Procedural Terminology code was not available, the chargemaster was searched on a case-by-case basis using the search terms IMRT, rad tx, radiation, simple, and intensity modulated. Figure 1 outlines the schema for the search.

No institutional review board approval was required to report publicly available information. Informed consent was not required because no human participants were involved.

We extrapolated the prices to a standard 28-fraction hypofractionated prostate cancer radiation course. We defined the accuracy of the chargemaster prices by evaluating whether the relative price variation between the hospitals at the 10th percentile and the 90th percentile of price were similar to the variation typically seen in commercial claims databases (50%-300%) and whether the prices are between 100% and 400% of Medicare payment rates (the typical range of rates paid to hospital outpatient departments by commercial payers).^9,10 We also probed the ease of use and consistency of nomenclature across chargemasters.

Finally, we determined whether the differences in chargemaster prices reflect variation in practice costs by correlating prices to the practice expense geographic practice cost index as determined by Medicare for each geographic area. Analysis was done with Excel 2016 (Microsoft). All P values less than .05 were considered significant.

Of the 63 hospitals reviewed, 52 (84%) listed a price for simple IMRT. Of the remaining 11 hospitals, 3 (5%) did not have a chargemaster available, and 8 (13%) had a chargemaster available but did not list a charge for simple IMRT. Of the 52 hospitals that did list a price, 3 (6%) listed a Current Procedural Terminology code, while the others listed a heterogeneous group of terms, including IMRT simple, intensity mod rad tx simple, imrt, rad tx, imrt prostate and breast, intensity modulated, tx delivery, and imrt radiation tx dlvr simple.

The mean (SD) listed price for 28 fractions was $111 729 ($69 395) in February 2019. The prices ranged from a minimum of $18 368 to a maximum of $399 056, representing a difference by a factor of 21.7. The 10th-percentile price was $56 239, and the 90th-percentile price was $186 550, which represents a difference by a factor of 3.3 and is higher than the typical price difference seen nationally for outpatient procedures overall.⁹ The mean listed price of $111 729 was 10.1 times the $11 091 that Medicare would pay and outside of the 100% to 400% of Medicare rates that private payers typically pay.¹¹

We plotted the association between radiation price and hospital geographic practice cost index in Figure 2. There was a weak positive Pearson correlation between price and geographic practice cost index, with an r² value of 0.13 (P = .008).

We found the CMS-mandated list prices for prostate cancer radiation therapy have a more than 20-fold difference in prices with wide SDs among NCI-designated cancer centers. Prices were listed per individual procedure (not the entire course of care), were often difficult to find on the website, and used inconsistent nomenclature for procedures across different hospitals. Prices also varied more than is typically expected in commercial insurance market and had a mean price more than 10 times the price that Medicare pays, making it unlikely that the price information is reliable enough to facilitate comparison shopping or drive price competition.⁹

We used patients with prostate cancer as an example because these patients often have various treatment options and seek second opinions at different institutions, but the results can be applied to other patients who need radiation therapy as well. We found that the CMS mandate is of limited value. Although high list prices are positively correlated with prices paid by patients and their insurers, the actual amount paid is generally substantially lower.^6,7,12 For a patient or physician, it is difficult to determine how price information translates to financial burden for patients with insurance, given differences in insurance plan design; differences in defined preferred provider networks, copayments, and deductibles may drive differences in patient cost more than hospital charges. Even the patients with the greatest sophistication may have difficulty deciphering price information.

This study has some limitations. Although we analyze the price per fraction of radiation treatment, which accounts for 50% to 75% of the entire cost of a radiation-treatment episode, there are many other radiation and ancillary services (eg, weekly status checks, the computed tomography simulation, imaging, laboratory tests) that are delivered and billed before or during the course of treatment and would affect the total cost of care. The oncology care model does encourage participating practices to provide estimated out-of-pocket and total cost estimates for patients, but participating practices have had difficulty meeting this goal.¹³ Lastly, as aforementioned, the actual negotiated rates can be quite different than the listed price.

Price transparency efforts by certain states and health plans have sought to provide more actionable price information by focusing on reimbursem*nt from the insurer or the out-of-pocket costs paid by the patient.¹⁴ On June 24, 2019, President Trump issued an executive order that aims to mandate disclosure of negotiated rates between insurers, hospitals, and physicians to provide more actionable cost information.¹⁵ Whether this will be realized remains to be seen, and future policies will merit continued study. In summary, we found the availability of CMS-mandated hospital chargemasters and the descriptors used for simple IMRT are not uniform, and the listed charges are highly variable. This study suggests that implementation of the CMS price transparency policy may not be sufficient to enable patients to estimate or compare prices. Finally, the potential harm of discouraging appropriate care by listing inaccurately high prices deserves further study. Price transparency has the potential to drive value-based decision-making and decrease the financial toxicity of cancer care; however, this analysis demonstrates the potential perils and shortcomings of recent price transparency policy.

Accepted for Publication: October 11, 2019.

Published Online: January 16, 2020. doi:10.1001/jamaoncol.2019.5690

Correction: This article was corrected on March 12, 2020, to correct an error on the y-axis of Figure 2. The number 500 was corrected to 50 000.

Corresponding Author: Trevor J. Royce, MD, MS, MPH, Department of Radiation Oncology, University of North Carolina at Chapel Hill, 101 Manning Dr, CB 7512, Chapel Hill, NC 27599 (trevor_royce@med.unc.edu).

Author Contributions: Dr Agarwal had full access to all the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: All authors.

Acquisition, analysis, or interpretation of data: Agarwal, Dayal, Kircher, Royce.

Drafting of the manuscript: Agarwal, Dayal, Royce.

Critical revision of the manuscript for important intellectual content: All authors.

Statistical analysis: Agarwal, Dayal, Royce.

Administrative, technical, or material support: Dayal, Royce.

Supervision: Kircher, Royce, Chen.

Conflict of Interest Disclosures: None reported.

Meeting Presentation: This study was presented as an oral presentation at the American Society for Radiation Oncology 2019 Annual Meeting; September 18, 2019; Chicago, IL.