Price Transparency Data Reveals Most Expensive Brain MRI Locations

March 27, 2023 - A study of negotiated rates under the new hospital price transparency rule has identified the most expensive type of hospital to receive a brain MRI.

Since Jan. 1, 2021, the federal government has required hospitals to disclose their prices, including payer-specific negotiated charges, on their websites. Although compliance has been spotty over the past two years, researchers from Michigan State University, Yale University, and Johns Hopkins University recently leveraged the new data to compare commercial rates for magnetic resonance imaging (MRI) of the brain before and after contrast (Current Procedural Terminology code 70553). They investigated hospital characteristics associated with commercially negotiated prices nationwide.

The study revealed that nonprofit and government hospitals had higher commercially negotiated prices for brain MRI than for-profit hospitals.

Additionally, hospitals located in rural areas, contracting with more health plans, or treating more Medicare patients had higher prices.

For a brain MRI, the median commericial price was $1,900 for nonprofit, system-affiliated hospitals in urban areas. These type of hospitals also contracted with a median of 11 health plans. The study also found that commercial prices for a brain MRI at nonprofit and government hospitals were $387 and $537 higher, respectively, than the prices at for-profit hospitals

Rural hospitals part of a health system also charged up to $363 more for a brain MRI compared to their urban peers, according to hospital price transparency data for compliant hospitals.

Researchers said in the study that the findings are "potentially reflecting these hospitals' stronger bargaining power compared with insurers in their local markets."

Nonprofit and government hospitals tend to be considered the cheaper option for healthcare, especially compared to for-profit hospitals. However, the study's researchers say that notion is false and their findings underscore the idea that commercially negotiated prices are more tied to hospital market power than ownership status.

The study indicates that more competition is needed to bring down healthcare prices. Research suggests that the recent trend toward provider consolidation has increased costs for consumers with little to no quality improvements.

Industry experts have called on federal and state governments to promote competition within healthcare by reducing administrative burden, requiring price transparency, and reforming Medicare reimbursement policies, such as site-neutral payments. Some of these initiatives, like hospital price transparency, have yet to prove their effectiveness when it comes to fostering competition in healthcare.

However, a recent report from the Brookings Institution has identified site-neutral payments and price transparency as pro-competitive reform options for Congress to lower healthcare costs. For price transparency, in particular, the think tank said Congress could require transparency of ownership status.

The report also suggested greater antitrust enforcement, Part B payment reform, and contracting changes to encourage more competition in healthcare.