Employer health plans paid hospital outpatient departments an average of 102% more per unit than physician offices for the same injected and infused medications, according to new research from the Employee Benefit Research Institute(EBRI). These drugs are given by clinicians in a medical setting and include treatments for cancer, autoimmune diseases, and other serious chronic conditions.
EBRI estimates that paying hospital clinics at office rates would save employer plans about $12.7 billion a year, or roughly $101 per covered member. That estimate extends the findings to all physician-administered outpatient drugs; the 106 drugs studied directly accounted for about $9.8 billion of the difference, Fierce Healthcare reported. The issue brief, by Paul Fronstin and M. Christopher Roebuck, was published September 24 and draws on commercial claims from 2023 and 2024.
For patients, the key question is not whether a hospital is doing something wrong. It is whether the same drug could be given in a lower-cost setting that is still safe for them, and who ultimately pays the difference.
Same Medication, Different Price Tag
EBRI analyzed 106 of the highest-spending physician-administered outpatient drugs, which made up about 77% of spending in that category, using claims for adults ages 18 to 64 with job-based coverage. Hospital departments received higher payments for 93 of the 106 drugs, with a median per-unit difference of 64%, Becker's Hospital Review reported.
The gap adds up quickly. The median annual difference was $5,531 per patient, and for one cancer drug it reached $135,306. About 59% of administrations happened in hospital outpatient departments, compared with 31% in physician offices and 9% in other settings, including patients' homes.
Cancer drugs are among the most expensive infused medicines, so even a modest percentage markup can mean a large dollar difference in plan spending for each patient.
The markup has shrunk but not disappeared. For drugs in EBRI's earlier analysis, the median hospital markup fell from 98% in 2019 to 70% in 2024, mostly because office payments rose. EBRI pointed to hospital purchases of physician practices, negotiating leverage, and facility payments as contributors.
"Where a medication is administered can have a significant effect on what an employment-based health plan pays, even when the medication itself is the same," said Paul Fronstin, director of health benefits research at EBRI, in a statement published by ADVISOR Magazine. He added that "not every treatment can or should be provided in a lower-cost setting," but said reducing unnecessary payment differences could, over time, help ease cost pressures for workers and their families.
Who Actually Pays the Difference
This is a claims analysis, not a clinical study, and it does not suggest that hospital care is worse or unnecessary. It compared what plans paid for the same drugs in different settings. The research was funded with support from employers, insurers, and drugmakers, Fierce Healthcare reported, and EBRI describes itself as nonpartisan.
The immediate savings would mostly go to employers and health plans. Among the claims studied, 90% carried no deductible payment, 80% had no coinsurance, and 97% had no copay. Patients on these costly drugs often reach their plan's out-of-pocket maximum early, which leaves most of the price difference with the plan.
That does not mean patients are unaffected; the burden mainly shifts in timing. People who start treatment in January, change plans, or have high-deductible coverage may pay coinsurance on a higher hospital price before reaching their limit. As an illustration, 20% coinsurance on a $4,000 dose is $800, compared with $400 on a $2,000 dose. Over time, EBRI said, higher plan spending adds to cost pressures on workers.
Where You Live Shapes Where You Get Infused
Geography matters. An earlier EBRI analysis of state and metro differences, based on 2021 data, found that the share of these drugs given in hospital outpatient departments ranged from 32% to 84% across states and from 30% to 85% across metro areas. In markets where health systems own most specialty practices, an independent office option may be limited or unavailable.
Policymakers are watching. MedPAC, the nonpartisan commission that advises Congress on Medicare, has said Medicare should move toward more site-neutral payments for services that are safe to provide in any setting. Those recommendations apply to Medicare, not employer plans. Hospital groups oppose broad site-neutral cuts, saying their outpatient departments carry costs that offices do not, including emergency readiness and a wider range of services.
Questions to Ask Before Your Next Infusion
Patients receiving infusions for cancer, autoimmune disease, or multiple sclerosis can take a few practical steps. First, ask the care team how the infusion will be billed. A clinic inside or owned by a hospital may bill as a hospital outpatient department and add a facility fee, even if it looks like a regular office.
Second, call your insurer and ask whether an in-network physician office, ambulatory infusion center, or home infusion option covers your drug, and what your coinsurance would be at each. Some plans run site-of-care programs that steer stable patients toward lower-cost settings. Ask whether such a program applies to you, whether it requires prior authorization, and whether your infusion nurse or clinic would change.
Third, review your Explanation of Benefits after each treatment and compare the allowed amount across visits. Do not switch sites without your doctor. Patients with a history of infusion reactions, complex regimens, or unstable conditions may need hospital-level monitoring, and that clinical judgment should come first.
The same drug can cost far more depending on where it is given, and patients can ask about lower-cost options without compromising safety. Employer contracts and federal site-neutral proposals will shape whether those price gaps narrow further.
Key Questions Answered
What did the EBRI study find? Hospital outpatient departments were paid an average of 102% more per unit than physician offices for the same injected or infused drugs.
How much money is involved? EBRI estimates about $12.7 billion a year in employer plan spending, or roughly $101 per covered member.
Will moving my infusion lower my bill? It depends on your plan. Many infusion patients have already met their out-of-pocket maximum, so savings may show up mainly for the plan and, over time, in costs for workers.
How can I tell if my clinic bills as a hospital? Ask the clinic and your insurer directly, and check your Explanation of Benefits for facility fees.
Should I switch infusion sites on my own? No. Talk with your doctor first, since some patients need hospital-level monitoring.
Are lawmakers addressing this? Site-neutral payment proposals are under debate, and hospital groups oppose broad cuts.
Published by Medicaldaily.com
