Market determinants of commercial prices for intravenous chemotherapy infusions

1585 Background: Recent price transparency legislation mandated that hospitals across the country report their individually negotiated prices with insurers. Using this data, we sought to characterize the prices paid for standard intravenous (IV) chemotherapy infusions, and determine the hospital, regional, and market factors associated with higher prices. Methods: We utilized a database of U.S. hospital-reported price transparency data to characterize prices for the most commonly billed chemotherapy drug administration Common Procedural Terminology (CPT) codes— 96413 (initial IV chemotherapy infusion) and 96415 (additional hour of IV chemotherapy). We obtained standard charges and commercial prices negotiated with private payers from hospitals that directly administer chemotherapy. To assess variation in prices, we calculated the ratio of the 90th percentile price to the 10th percentile price among private payers in each hospital and among hospitals in each Hospital Referral Region (HRR). We performed multivariable linear regressions to assess hospital, regional, and market factors associated with higher prices. Results: A total of 1,458 hospitals reported at least one price for CPT code 96413 or 96415. Hospitals reported 1 chargemaster and a median of 18 (IQR: 8–35) commercial prices negotiated with different private payers. National median commercial prices for CPT codes 96413 and 96415 were $536.00 (IQR: $326.43-$784.63) and $175.06 (IQR: $98.28-$327.25), respectively. Within each hospital, the 90th percentile commercial price was 2.2 times higher, on average, than the 10th percentile price for CPT code 96413, and 2.8 times higher for 96415. Among different hospitals within each HRR, the median commercial price at the 90th percentile hospital was 1.5 times higher than at the 10th percentile for CPT code 96413, and 2.3 times higher for 96415. On multivariable analysis, higher prices for CPT code 96413 were observed at for-profit hospitals ($215.12 higher than government not-for-profit hospitals, 95% CI: $55.22-$429.61). Higher prices for CPT code 96415 were observed at hospitals with higher predicted practice costs ($35.79 for every 1% increase in the geographical practice cost index, 95% CI: $16.69-$54.87), and a lower disproportionate share percentage ($0.96 for every 1% decrease in DSH patient percentage, 95% CI: $0.08-$19.41). Conclusions: Commercial prices for commonly billed IV chemotherapy infusions demonstrate significant variability. Prices for identical infusions vary by a factor of 2 depending on which hospital or private payer a patient selects. While prices for CPT code 96415 are largely explained by the relative cost of care, prices for the more expensive 96413 appear to be driven by the profit-status of the hospital. Further study is required to characterize the implications of such high levels of price variability on access to care and overall healthcare costs.