Professional, Hospital E/M Charge Index Continued to Grow in 2021

The median charge index for hospital evaluation and management (E/M) visits increased by 7 percent during the COVID-19 pandemic, according to a white paper from FAIR Health.

The FH Medical Price Index used FAIR Health’s benchmark products to analyze changes in hospital charge amounts across six different categories, including professional E/Ms, hospital E/Ms, medicine, surgery, pathology and laboratory, and radiology.

The report includes data from November 2020 to November 2021 and highlights the price increases that occurred during the COVID-19 pandemic, excluding facility fees.

The charge amount index and allowed amount index for professional E/M visits saw steady growth, each increasing by 4 percent. The charge amount index rose from 1.38 in 2020 to 1.44 in 2021, while the allowed amount index went from 1.39 to 1.44.

These services include CPT codes for office visits and consultations performed in a non-hospital professional setting.

This category of CPT codes is likely to see utilization variation in the future, the report noted, as the American Medical Association altered some of the codes in 2021 in an attempt to simplify coding and documentation of office visits and other outpatient E/M services.

Out of the six categories, hospital E/M services saw the most significant increases in charge amount index and allowed amount index. The indices include CPT codes for procedures performed in a hospital setting, initial hospital care per day, and emergency department visits of moderate severity.

The hospital E/M charge amount index increased by 7 percent, from 1.61 in 2020 to 1.72 in 2021. CPT codes 99285 and 99284 for high-severity emergency department visits with and without immediate threat to life or function were significant drivers behind the charge amount increases in 2021, with median charges and frequencies rising.

While the hospital E/M allowed amount index saw slower growth in 2021 than in 2020, it still rose 5 percent from 1.60 in November 2020 to 1.68 in November 2021.

Hospital E/M visit charges and allowed amounts have been on the rise since May 2012, the report noted.

The amount indices for medicine had a smaller growth than E/M visits but still increased by 2 percent between 2020 and 2021. The median charge amount index went from 1.26 to 1.29, while the allowed amount index rose from 1.40 to 1.43.

The medicine indices include non-E/M procedures such as immunizations, dialysis procedures, psychiatry services, and allergy and immunology procedures.

The radiology indices saw similar modest increases, with the charge amount index going from 1.08 to 1.10—a 2 percent increase—and the allowed amount index increasing by only 1 percent from 1.17 to 1.18. This category included CPT codes for X-rays, radiographs, ultrasounds, computed tomography (CT), and positron emission tomography (PET).

The surgery indices—consisting of procedures for which physicians would bill, such as biopsies—also saw growth in 2021. The surgery charge amount index continued its high growth rate and increased by 5 percent from 1.20 to 1.26. The allowed amount index for surgery grew by 4 percent from 1.27 in 2020 to 1.32 in 2021, the report indicated.

Finally, the report highlighted the changes in pathology and laboratory indices. These included CPT codes for organ or disease-oriented panels, therapeutic transfusion medicine, and drug testing.

The pathology and laboratory charge amount index has been increasing quickly since 2019 and experienced a 5 percent growth in 2021. The index rose from 1.23 in 2020 to 1.29 in 2021. The allowed amount index for these services saw a slightly lower boost of two percent, going from 1.18 to 1.20.

Hospitals and consumers alike have felt the financial repercussions of the COVID-19 pandemic. Consumers have faced rising hospital prices, as the FAIR Health report detailed, while hospitals continue to experience negative operating margins and revenue declines in 2022.

Although some may think high hospital prices will lead to better quality care, data from the National Bureau of Economic Research revealed that higher-priced hospitals only led to improved health outcomes in unconcentrated markets.