Commercial Price Variation in Ophthalmology

This study assesses the variation in commercial insurance payment rates for common ophthalmology procedures across major national insurers and identifies patterns in professional and facility fees.

Key Points

Question

How variable are commercial insurance payments for common ophthalmology procedures across major national insurers?

Findings

This cross-sectional study of insurer-posted Transparency in Coverage data found that facility fees exhibit far greater price variation than professional fees; major insurers show divergent payment patterns with Blue Cross Blue Shield consistently above average, while Aetna, Cigna, and United Healthcare display varying professional and facility fee rates, and geographic variation in pricing is substantial, with median facility fees for cataract surgeries differing by a factor of 5 across states

Meaning

The findings highlight substantial price variability driven by market dynamics, necessitating policies to enhance transparency and promote competitive pricing in health care.

Abstract

Objective

To assess the variation in commercial insurance payment rates for common ophthalmology procedures across major national insurers and identify patterns in professional and facility fees.

Design, Setting, and Participants

This cross-sectional study used January 2025 Transparency in Coverage data, payment rates negotiated between insurers and health care professionals from 4 large national insurers (Blue Cross Blue Shield, United Healthcare, Cigna, and Aetna) for 10 common ophthalmology procedures. Data included approximately 684 506 professional fee price points from 15 788 physicians and 55 930 facility fee price points from 4697 facilities. Data were analyzed January through March 2025.

Main Outcomes and Measures

The primary outcomes were the distribution of negotiated prices (mean, median, percentiles), coefficients of variation, and volume-weighted price indices by payer for professional and facility payments by commercial insurers. Geographic variation in pricing was also assessed.

Results

Negotiated facility fees showed substantially greater price variation than professional fees across all ophthalmology procedures, with facility coefficients of variation exceeding professional coefficients by factors of 2 to 4. Blue Cross Blue Shield maintained consistently higher payments (14% above market average for professional fees; 13% above for facility fees), while Aetna demonstrated dramatic variation with professional fees 54% below average but facility fees 45% above average. Geographic analysis revealed substantial state-level variability, with facility prices for standard cataract surgeries showing up to 5-fold differences between upper and lower bounds across states.

Conclusions and Relevance

This study reveals substantial variability in commercial insurance payment rates for ophthalmology procedures, particularly in facility fees. These findings indicate that market dynamics, insurer-health care professional negotiations, and geographic factors substantially influence price variation, which has important implications for health care affordability and access to ophthalmologic care.

Introduction

Clinicians face large variation in reimbursement rates from commercial insurers. Unlike Medicare rates, commercial rates are established through a negotiation process that is not transparent, resulting in rates that are highly variable and opaque.¹ Lack of transparency limits the ability of regulators to monitor prices and employers, patients, and purchasers to impose market discipline on prices. The private market lacked meaningful price transparency for patients and purchasers, until the recent implementation of Transparency in Coverage (TiC) rules.² Negotiated rates alone cannot predict individual patient costs, which depend on plan-specific deductibles, coinsurance, and financial arrangements, like flexible spending accounts or health spending accounts, but increased price transparency can facilitate discussions between physicians and patients about health care affordability.³ And given clinician concerns with insurer strategies on reimbursement, prior authorization, and other forms of indirect management, it is important for clinicians to have data on and understand variations in payment across insurers. Additionally, both purchasers and policymakers may also use price information to appropriately design initiatives that ensure sustainable health care costs.⁴

Price transparency in ophthalmology is especially relevant given the increasing prevalence of age-related eye conditions and the growing burden of vision-threatening diseases in our aging population.⁵ Beyond an understanding of data usability/availability issues⁶ and substantial interhospital price variation,⁷ price variation for common ophthalmology procedures has not been widely examined for large commercial payers since the implementation of rules. To help fill this gap, we used the TiC data to examine variation in commercial insurance payment rates for common ophthalmology procedures.

Methods

We examined January 2025 TiC price data collected by a third-party vendor, ClarifyHealth, for common ophthalmology procedures from 4 large national insurers (Blue Cross Blue Shield [BCBS], United Healthcare, Cigna, and Aetna), which collectively constitute 78% market share.⁸ We analyzed commercial prices (excluding Medicare Advantage) for insurance providers with billed claims during the 2023 contract year for 10 common ophthalmology procedures. Prices reflect the allowed amount, which is the amount negotiated between an insurer and health care professional for a given Current Procedural Terminology (CPT) code (distinct from the cash price and chargemaster rate), and includes both payments from the insurer and patient cost-sharing responsibilities. On average, cash prices are about 64% and commercial negotiated rates about 58% of the corresponding chargemaster prices for the same procedures at the same hospital.⁹

For professional fee prices, our sample had approximately 684 506 price points and 15 788 unique physicians. For facility fee prices, our sample included approximately 55 930 price points and 4697 facilities. We analyzed distributional differences in prices (mean, median, and percentiles), coefficients of variation, and price indices by payer (eMethods in Supplement 1).

Brown University’s institutional review board deemed this cross-sectional study exempt from ethics review and informed consent because the study used deidentified price data. We followed Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guidelines. Data analysis was performed using R version 4.4.1 (The R Project).

Results

Professional pricing demonstrates notably less variation than facility pricing across ophthalmology procedures (Table 1). Facility coefficients of variation frequently exceed their professional counterparts by factors of 2 to 4, particularly evident in procedures like laser trabeculoplasty (CPT 65855), where the facility coefficient reaches 3.21 compared with 0.70 for professional fees. Cataract surgeries (CPTs 66984 and 66982) had comparatively consistent pricing patterns with lower coefficients of variation in their facility fees, but still double the coefficients of variation of their corresponding professional fees.

Table 1. Average Prices and Price Variation for 10 Common Ophthalmology Procedures^a.

Code description	Service code	Unique health care professionals	Professional fee prices				Facility fee prices
			Mean (SD)	Median (IQR)	Ratio of 75th-25th percentiles	Coefficient of variation	Mean (SD)	Median (IQR)	Ratio of 75th-25th percentiles	Coefficient of variation
Laser surgery for postcataract treatment	66821	11 055	452 (314)	357 (275-515)	1.88	0.69	1518 (4173)	567 (376-1473)	3.91	2.75
Eye drug injection	67028	5795	201 (147)	164 (117-230)	1.96	0.73	2469 (5429)	1185 (338-2898)	8.57	2.2
Preventive retinal detachment procedure	67 145	3758	651 (494)	504 (360-742)	2.06	0.76	1849 (4552)	755 (394-1978)	5.02	2.46
Chalazion removal from eyelid	67800	5298	164 (112)	132 (107-179)	1.68	0.68	1273 (1875)	548 (198-1490)	7.51	1.47
Nonchalazion eyelid lesion removal	67840	4704	321 (236)	259 (196-353)	1.8	0.73	2081 (4671)	931 (487-2382)	4.89	2.24
Iris revision surgery	66761	6355	437 (287)	373 (285-477)	1.67	0.66	1437 (3903)	507 (334-1353)	4.04	2.72
Laser trabeculoplasty surgery	65855	5938	378 (266)	313 (240-417)	1.74	0.7	1569 (5031)	483 (303-1358)	4.48	3.21
Treatment for severe retinopathy	67228	3606	877 (752)	708 (398-1052)	2.65	0.86	1952 (3538)	998 (413-2464)	5.97	1.81
Complex cataract removal without ECP	66982	8245	1215 (783)	1024 (794-1357)	1.71	0.64	3474 (4696)	2232 (1256-4408)	3.51	1.35
Cataract removal without ECP	66984	10 214	914 (626)	750 (581-1020)	1.75	0.68	3595 (4578)	2402 (1276-4470)	3.5	1.27

Abbreviation: ECP, endoscopic cyclophotocoagulation.

^a These data represent January 2025 TiC data from ClarifyHealth, which aggregates price data for the 2023 contract year. Prices reflect the allowed amount, which is the amount negotiated between an insurer and health care professional for a given Current Procedural Terminology code (distinct from the chargemaster rate). See eTable 1 in Supplement 1 for this table disaggregated by commercial payer.

Volume-weighted price indices reveal distinct patterns across payers. BCBS consistently maintains higher payments, with professional prices 14% above market average and facility prices 13% above average. Aetna shows the most dramatic variation, with professional fees 54% below average but facility fees 45% above average. Cigna and United Healthcare present mixed patterns, with professional fees near market average but facility fees substantially below (48% and 18% below average, respectively) (Table 2).

Table 2. Professional and Facility Price Indices by Payer for Ophthalmology Procedures.

Payer source	Professional price indexa	Facility price indexa
Aetna	0.46	1.45
All 4 payers	1	1
Blue Cross Blue Shield	1.14	1.13
Cigna	1.03	0.52
United Healthcare	1.01	0.82

^a The methodology for calculating these volume-weighted price indices is shown in the eMethods in Supplement 1.

Disaggregated analysis by both service and payer (eTable 1 in Supplement 1) reveals substantial price variation. Median facility fees for standard cataract surgery (CPT 66984) range from $1521 (Cigna) to $4274 (Aetna), and median facility fees for complex cataract surgery (CPT 66982) range from $1618 (Cigna) to $4087 (Aetna). The professional interquartile ratios were lowest for Aetna’s laser trabeculoplasty (CPT 65855), with an IQR from $119 to $171 (ratio: 1.45), and highest for United Healthcare’s panretinal photocoagulation (CPT 67228), with an IQR from $404 to $1091 (ratio: 2.7). Facility interquartile ratios were lowest for Cigna’s complex cataract surgery (CPT 66982), with an IQR from $1245 to $2232 (ratio: 1.79), and highest for Aetna’s nonchalazion eyelid lesion excision (CPT 67840), with an IQR from $743 to $5517 (ratio: 7.43).

The Figure maps the variation in prices for standard cataract surgeries (CPT 66984) across US states as a descriptive example of price variation for ophthalmology procedures by geography. Median professional prices have an upper limit of approximately 2 times their lower bound across states, and median facility prices have an upper limit of approximately 5 times their lower bound across states. Similar findings were present for other procedures.

Figure. Map of Median Rates by State for Standard Cataract Surgery (Current Procedural Terminology Code 66984).

Discussion

The findings of this study highlight substantial variation in commercial pricing for common ophthalmology procedures, with facility prices exhibiting far greater variability than professional prices. Unique to this study, we were able to observe not just geographic variation in commercial prices, but also payer-specific variation that suggests unique bargaining strategies. The higher prices observed for BCBS likely reflect their market power and strategic decision to maintain broad insurance provider networks, which typically require higher reimbursement rates to attract and retain health care professionals.^10,11 Cigna’s consistently lower prices across services suggest a successful implementation of selective contracting with health care professionals who accept lower reimbursement rates in exchange for higher patient volume.¹⁰ Conversely, Aetna’s lower professional fees but higher facility fees may indicate an aggressive negotiating stance with insurance providers and while maintaining broad facility networks.¹² Rather than excluding high-cost facilities, Aetna appears willing to pay premium facility rates, possibly to ensure adequate geographic coverage for members. This pattern may reflect either Aetna’s market positioning strategy or its network composition, which could include a higher proportion of facilities with greater market leverage. United Healthcare’s pattern of average professional fees but lower facility fees may reflect a vertical integration strategy through its subsidiary, Optum, where it can better control facility costs through direct ownership while maintaining competitive physician compensation to ensure network adequacy.¹³ Consistent with prior national analyses,¹ we found that commercial rates for ophthalmic procedures substantially exceed Medicare rates—often by more than double. Medicare reference rates are provided in eTable 1 in Supplement 1 for context.

Price variation in ophthalmology is particularly relevant due to the increasing prevalence of age-related eye conditions in an aging population, rapid technological advancements introducing new cost considerations, and complex insurance coverage scenarios that arise from vision care often falling between medical and vision insurance. The cost burden on patients and insurers can differ widely depending on the location and the service provided, potentially exacerbating health care inequities. The geographic variation in prices further underscores the influence of local market dynamics, such as hospital consolidation, competition, and regional cost structures, on health care pricing (Figure; eTable 2 in Supplement 1). Outlier states, such as Connecticut and Alaska, with higher than average prices, may be explained by strong physician practices and academic centers¹⁴ or Medicare payment policy.¹⁵ Our findings of greater variation in facility fees may also reflect differences in site-of-service utilization, as procedures like cataract surgery can be performed across multiple settings (hospitals, ambulatory surgical centers, and office-based surgery suites). Significant price differentials exist between settings, with hospital outpatient departments charging approximately 44% more than ambulatory surgical centers for cataract removal.¹⁶

Limitations

Limitations include cross-sectional data that may not capture seasonal variations, longitudinal trends, or recent market changes. We also cannot track how much of the difference in payments translates to differences in physician compensation

Conclusions

Future work should examine the underlying causes of price variation in ophthalmology. Existing studies show no relationship between prices and care quality or efficiency.¹⁷ If price variation is driven by consolidation or anticompetitive contracting, then regulators should design policies that ensure competitive health care markets.

Supplement 1.

eMethods. Price Index Construction

eTable 1. Average Prices and Price Variation for 10 Common Ophthalmology Procedures by Payer

eTable 2. Professional and Facility Price Indices by State for Ophthalmology Procedures

Supplement 2.

Data Sharing Statement