GROWTH IN PRIVATE-PAYER MARKUPS FOR INFUSED CHEMOTHERAPY RELATIVE TO MEDICARE AVERAGE SALES PRICE BY SITE OF CARE, 2015-2023
Author(s)
Jyotirmoy Sarker, PhDc1, Aaron N. Winn, MPP, PhD2;
1University of Illinois at Chicago, Chicago, IL, USA, 2University of Illinois at Chicago, Associate Professor, Chicago, IL, USA
1University of Illinois at Chicago, Chicago, IL, USA, 2University of Illinois at Chicago, Associate Professor, Chicago, IL, USA
OBJECTIVES: Medicare reimburses most infused chemotherapy based on a standardized Average Sales Price (ASP), which serves as a transparent benchmark tied to drug acquisition costs. In contrast, private insurers negotiate prices that may deviate substantially from ASP, with growing concern that site-of-care payment differentials amplify spending growth. This study evaluates trends in private-payer reimbursement markups relative to Medicare ASP for infused chemotherapy from 2015-2023, comparing physician office and hospital outpatient department (HOPD) settings.
METHODS: We used de-identified data from MarketScan Commercial Claims to identify privately insured patients who received physician-administered infused chemotherapy between 2015 and 2023. For each claim, we calculated the ratio of total reimbursed amount to Medicare ASP, derived by multiplying publicly reported ASPs by units administered. Site of care was classified as physician office or HOPD. We estimated annual mean reimbursement-to-ASP ratios by site of care. Linear regression models adjusted for year, site of care, and a year-by-site interaction assessed differential growth in markups over time.
RESULTS: Private-payer reimbursement relative to Medicare ASP increased steadily over the study period in both settings, but growth was substantially larger in HOPDs. Mean reimbursement-to-ASP ratios in HOPDs increased from approximately 1.5 in 2015 to more than 2.2 by 2023, while ratios in physician offices increased from near parity with ASP to approximately 1.4. In adjusted models, the interaction between year and physician office setting was statistically significant (−0.06; p<0.05), indicating that markups grew more slowly in physician offices than in HOPDs.
CONCLUSIONS: Private-payer prices for infused chemotherapy are increasingly decoupled from Medicare ASP benchmarks, particularly in hospital outpatient settings. These findings suggest that site-of-care payment differentials contribute not only to higher overall spending but also to faster growth in margins over acquisition-based reference prices. Ongoing policy efforts focused on site-neutral payment and price transparency may have important implications for moderating private-payer chemotherapy spending growth.
METHODS: We used de-identified data from MarketScan Commercial Claims to identify privately insured patients who received physician-administered infused chemotherapy between 2015 and 2023. For each claim, we calculated the ratio of total reimbursed amount to Medicare ASP, derived by multiplying publicly reported ASPs by units administered. Site of care was classified as physician office or HOPD. We estimated annual mean reimbursement-to-ASP ratios by site of care. Linear regression models adjusted for year, site of care, and a year-by-site interaction assessed differential growth in markups over time.
RESULTS: Private-payer reimbursement relative to Medicare ASP increased steadily over the study period in both settings, but growth was substantially larger in HOPDs. Mean reimbursement-to-ASP ratios in HOPDs increased from approximately 1.5 in 2015 to more than 2.2 by 2023, while ratios in physician offices increased from near parity with ASP to approximately 1.4. In adjusted models, the interaction between year and physician office setting was statistically significant (−0.06; p<0.05), indicating that markups grew more slowly in physician offices than in HOPDs.
CONCLUSIONS: Private-payer prices for infused chemotherapy are increasingly decoupled from Medicare ASP benchmarks, particularly in hospital outpatient settings. These findings suggest that site-of-care payment differentials contribute not only to higher overall spending but also to faster growth in margins over acquisition-based reference prices. Ongoing policy efforts focused on site-neutral payment and price transparency may have important implications for moderating private-payer chemotherapy spending growth.
Conference/Value in Health Info
2026-05, ISPOR 2026, Philadelphia, PA, USA
Value in Health, Volume 29, Issue S6
Code
P59
Topic
Health Policy & Regulatory
Topic Subcategory
Pricing Policy & Schemes, Reimbursement & Access Policy
Disease
SDC: Oncology