Colonoscopy Payment Model Encouraged Use of Low-Priced Facilities


A payment system for colonoscopies offering full insurance coverage at low-priced facilities and cost sharing at high-priced alternatives reduced spending with no increase in complications.

Image © Sebastian Kaulitzki /

The introduction of a reference payment system that offered full insurance coverage at low-priced facilities but required substantial cost sharing if patients picked a high-priced alternative by the California Public Employees’ Retirement System (CalPERS) resulted in reduced spending on colonoscopy with no increase in complications associated with the procedure, according to the results of a new study.

“The implementation of reference payments for colonoscopy accelerated the shift in patient choice toward lower-priced facilities,” James C. Robinson, PhD, of the University of California-Berkeley, and colleagues wrote in JAMA Internal Medicine. “In the first 2 years after implementation, CalPERS saved $7.0 million (28%) compared with what it would have spent on colonoscopy in the absence of a reference payment initiative.”

CalPERS implemented reference payment in January 2012. In this study, Robinson and colleagues looked at data from more than 21,000 of its enrollees who had colonoscopy 3 years prior to reference payment implementation and more than 13,000 who had colonoscopy in the 2 years after implementation to determine if the new system affected facility choice, insurer spending, consumer cost sharing, or colonoscopy complications. Data for a control group comparison was taken from 258,616 enrollees in Anthem Blue Cross who were not subject to a reference payment system.

Data showed that in 2009, 68.6% of CalPERS members utilized low-priced facilities compared with 90.5% in 2013.

The average price members paid for a colonoscopy prior to reference payment was $1,587 in 2009 and increased to $1,716 in 2011 compared with $1,508 in 2013 after the implementation of the reference payment system. After the researchers adjusted for several factors, reference payment was responsible for a 21% decrease in priced of colonoscopy (95% confidence interval [CI], −26% to −15.6%; P < .001).

The researchers also examined safety outcomes associated with the procedure at low-priced facilities and found a small decrease in procedural complication from 2.1% in 2009 to 2% in 2013; however, the difference was not statistically significant.

According to the researchers, “reference payment may be of particular value for preventive screening tests such as colonoscopy, where social policy and the Affordable Care Act seek to encourage utilization by minimizing consumer cost sharing. Consumer cost sharing can induce facilities to moderate prices, and the elimination of cost sharing can increase the price of preventive services.”

In a commentary published with the study, David Lieberman, MD, of Oregon Health and Science University, and John Allen, MD, of Yale University School of Medicine, wrote: “Although the findings of Robinson et al support the value of reference pricing for reducing costs of colonoscopy, several key issues require further study. … Regardless of whether the discussion is about reference or bundled pricing for colonoscopy, knee or hip replacements or other procedures, public reporting of cost information, as well as meaningful quality benchmarks, should be required. Patients selecting lower-cost centers require assurances that they are receiving high-quality care.”

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