The Reality of Commercial Payer-Negotiated Rates in Cleft Lip and Palate Repair

Background: Commercial payer-negotiated rates for cleft lip and palate surgery have not been evaluated on a national scale. The aim of this study was to characterize commercial rates for cleft care, both in terms of nationwide variation and in relation to Medicaid rates.Methods: A cross-sectional analysis was performed of 2021 hospital pricing data from Turquoise Health, a data service platform that aggregates hospital price disclosures. The data were queried by CPT code to identify 20 cleft surgical services. Within- and across-hospital ratios were calculated per CPT code to quantify commercial rate variation. Generalized linear models were used to assess the relationship between median commercial rate and facility-level variables and between commercial and Medicaid rates.Results: There were 80,710 unique commercial rates from 792 hospitals. Within-hospital ratios for commercial rates ranged from 2.0 to 2.9 and across-hospital ratios ranged from 5.4 to 13.7. Median commercial rates per facility were higher than Medicaid rates for primary cleft lip and palate repair ($5492.20 versus $1739.00), secondary cleft lip and palate repair ($5429.10 versus $1917.00), and cleft rhinoplasty ($6001.00 versus $1917.00; P < 0.001). Lower commercial rates were associated with hospitals that were smaller (P < 0.001), safety-net (P < 0.001), and nonprofit (P < 0.001). Medicaid rate was positively associated with commercial rate (P < 0.001).Conclusions: Commercial rates for cleft surgical care demonstrated marked variation within and across hospitals, and were lower for small, safety-net, or nonprofit hospitals. Lower Medicaid rates were not associated with higher commercial rates, suggesting that hospitals did not use cost-shifting to compensate for budget shortfalls resulting from poor Medicaid reimbursement.

Automated summary

This study aimed to evaluate the nationwide variation in commercial payer-negotiated rates for cleft lip and palate surgery and compare them to Medicaid rates. The results showed significant variation in commercial rates within and across hospitals, with lower rates in small, safety-net, or nonprofit hospitals. Additionally, there was no positive correlation between Medicaid rates and commercial rates.