Markup on Services Provided to Medicare Beneficiaries by Otolaryngologists in 2017: Implications for Surprise Billing

Abstract

The degree of markup between provider charges and Medicare prices reflects the potential balance bill for out-of-network commercially insured patients. Using publicly available Medicare data, we performed a retrospective cross-sectional analysis of markup ratios (MRs; ie, the ratio of submitted charges to Medicare-allowed prices) for services commonly performed by otolaryngologists in 2017. Median MRs were as follows: 2.9 (interquartile range, 2.0-4.3) in facility settings (eg, hospital) and 2.1 (interquartile range, 1.7-2.9) in nonfacility settings (eg, physician office). Among the 10 highest-markup procedures performed by otolaryngologists in facility and nonfacility settings, there was no consistent increase in median MRs between 2012 and 2017 (compound annual growth rates, –4.6% for labyrinthotomy to 24.6% for ultrasound-guided biopsy). Median MRs for these procedures were not consistently lower in states with surprise billing protection laws. These findings may reflect the comparatively low potential to “balance bill” patients for elective otolaryngologic services and the limitations of state-level protections against surprise billing.