As healthcare costs continue to rise, health plans are under increasing pressure to find sustainable ways to manage expenses while improving patient outcomes. One significant opportunity lies in supporting the transition of cardiology practices from hospital employment to independent practice. This shift not only reduces total cost of care but also improves patient experience and health outcomes. By eliminating hospital facility fees, leveraging lower-cost outpatient settings, and optimizing physician reimbursements, independent cardiology practices deliver high-quality, cost-effective care.

The Cost Savings of Site-of-Service Optimization

A key driver of cost reduction in independent cardiology is the shift from hospital outpatient departments (HOPDs) to office-based labs (OBLs) and ambulatory surgery centers (ASCs). These settings provide the same procedures at significantly lower costs without compromising quality.

• Medicare Reimbursement Differences: Medicare reimburses ASCs at roughly 50% of the HOPD rate for identical procedures. For example, a coronary stent placement (CPT C9600) costs Medicare about $10,042 in an HOPD but only $6,264 in an ASC, a 38% reduction in cost. Similarly, dual-chamber pacemaker insertion costs Medicare $10,934 in an HOPD versus $8,422 in an ASC, saving 23% per procedure.
• Commercial Insurance Savings: Private insurers experience similar reductions. A study of Blue Cross Blue Shield plans found that hospital outpatient procedures cost 44% more than those performed in an ASC. The RAND Hospital Price Transparency study found that commercial insurers pay 70% more for procedures performed in HOPDs compared to ASCs.
• Total Potential Savings: A transition where 75% of cardiology procedures move to OBL/ASC settings could reduce overall cardiology outpatient costs by 32-35%, translating into tens of millions of dollars in annual savings for health plans.

Eliminating Unnecessary Hospital Facility Fees

Independent cardiology practices do not bill facility fees, a primary cost driver in hospital-employed models. In a hospital setting, every visit or procedure includes a facility charge that can be 50-80% higher than the professional fee itself.

• No Double Billing: Independent physicians only bill for professional services, eliminating hospital-based outpatient fees. A study found that Medicare payments for the same physician services were 80% higher when billed under a hospital outpatient department due to these additional fees.
• Impact on Medicare and Commercial Payers: Across 120 transitioning cardiologists, eliminating these facility fees can result in $13-20 million in annual Medicare savings alone, with commercial insurers also benefiting from the removal of inflated hospital outpatient rates.

Independent Physician Reimbursement Efficiencies

Under an independent model, physician reimbursement structures are optimized for cost-effectiveness while maintaining fair compensation for providers.

• Professional Fee Adjustments: In an HOPD, physician services generate two payments: a lower professional fee to the doctor and a higher facility fee to the hospital. Under independent practice, the total payment per service is lower because only the professional fee remains. This change significantly reduces payer costs.
• Contracting Efficiencies: Independent practices negotiate their own rates, often linked to community benchmarks that are lower than the inflated rates health systems command. For commercial payers, this shift results in lower negotiated rates per procedure while maintaining provider profitability.

How Cost Savings Translate into Better Patient Outcomes

Beyond cost efficiency, independent cardiology practices enhance patient care through improved access, reduced out-of-pocket costs, and a stronger focus on patient-centered care.

• Lower Patient Cost-Sharing: Without hospital facility fees, patients pay less in deductibles and coinsurance, leading to greater affordability and adherence to treatment plans.
• Enhanced Care Accessibility: With more procedures performed in outpatient settings, scheduling is more flexible, wait times decrease, and care is delivered closer to home, improving patient convenience.
• Improved Quality Metrics: Studies show that cardiology procedures performed in ASCs and OBLs have equal or better patient outcomes compared to hospitals, with lower infection rates and fewer complications.

The financial benefits of independent cardiology practices extend far beyond cost savings for health plans—they improve the entire healthcare ecosystem. By transitioning procedures to lower-cost outpatient settings, eliminating unnecessary hospital facility fees, and optimizing physician reimbursement, independent cardiology delivers high-value, patient-centric care. Health plans that actively support independent cardiology practices stand to reduce total cost of care significantly while enhancing outcomes for their members.

Contact Atria Health to explore how independent cardiology can drive sustainable savings for your health plan.‍