AHA study: HOPD Medicare patients are poorer, sicker, more rural than those seen in physician offices

Editor's Note

Medicare patients treated in hospital outpatient departments (HOPDs) present with greater socioeconomic and clinical complexity than peers seen in independent physician offices, including higher prior emergency department (ED) visits and inpatient use. According to an American Hospital Association (AHA) study conducted by KNG Health Consulting and published on September 3, these differences challenge proposals to equalize payments across sites of care.

As detailed in the AHA coverage, KNG Health Consulting analyzed 2018 Q4 to 2024 Q2 Medicare claims and found HOPD patients are 54% more likely to be under 65 and disabled and 61% more likely to be dually eligible for Medicare and Medicaid. They more often live in rural counties (29.5% vs 17.8%) and in lower income areas (median county household income $76,086 vs $81,243). Clinically, HOPD patients carry higher severity: average Charlson Comorbidity Index 2.80 vs 2.08, with 57% having at least one complication or comorbidity compared with 48% in physician offices, and 25% vs 15% having a major complication or comorbidity.

The AHA also reports greater prior utilization among HOPD patients in the 90 days before a visit: prior ED use on 26% of visits vs 15% in physician offices, and prior inpatient stays on 15% vs 7%. Conditional inpatient metrics were also higher for HOPD patients, including mean total inpatient days (7.65 vs 5.12) and mean total inpatient payments in 2024 dollars (26,988 vs 19,106).

Hospitals deliver around-the-clock complex and emergency care, maintain standby capacity for disasters and public health emergencies, and meet higher regulatory and safety requirements than physician offices, the study notes. The AHA asserts Medicare reimbursement covered 83 cents per hospital dollar in 2023, with over 100 billion dollars in underpayments, while 2022–2024 general inflation rose 14.1% versus a 5.1% increase in Medicare net inpatient rates. The AHA argues additional site-neutral cuts would reduce access, particularly in rural and underserved communities.