News & Updates

August 28, 2022

Health Care Cost Institute: Employer-based Insurance Pays HOPDs 3x more than Physician Offices and Independent Labs for Identical Tests

A report issued in July 2022 compared prices for clinical lab tests between HOPDs and physician offices and independent labs among individuals with employer-based health insurance. The study included 232 million lab tests in 2019 resulting in $7 billion in spending. The report found the following:

  • Employer-based insurance is typically paying 3 times more for clinical lab tests when billed by HOPDs compared to identical tests billed by physician offices and independent labs.
  • Total spending on clinical lab tests in HOPDs has grown over 30% from 2016-2019, due almost entirely to price growth.
  • In 7 states, the markup for lab tests in HOPDs was over 6x the median price for the same tests in physician offices.
  • State policymakers could reduce the markup associated with HOPD-based lab tests through site-neutral payment policies for insurance plans regulated at the state level, and health insurers and self-insured employees should implement similar policies through benefit design. 

The authors note that “unlike surgeries or other medical procedures where clinical care may differ across settings due to physician practice or quality or patient complexity, such variation should not exist among clinical lab tests.”

To read the full report: