Employer Health Plans Pay More for Infused Drugs at Hospital Clinics Than at Doctors' Offices, Study Finds

Employer-sponsored health plans pay hospital outpatient departments about 102% more per dose, on average, than physician offices for the same injected and infused medicines, according to new research from the Employee Benefit Research Institute (EBRI). These treatments are administered in clinical settings and include drugs used for cancer, autoimmune disorders, and other serious chronic illnesses.

EBRI says that if hospital clinics were reimbursed at office rates, employer plans could save roughly $12.7 billion each year, or about $101 per covered member. The estimate is an extension of the findings across all physician-administered outpatient drugs; the 106 drugs examined directly accounted for about $9.8 billion of the difference, Fierce Healthcare reported. The issue brief, written by Paul Fronstin and M. Christopher Roebuck, used commercial claims data from 2023 and 2024.

For patients, the central issue is not whether hospitals are acting improperly. It is whether the same drug can be safely delivered in a less expensive setting, and who ends up covering the extra cost.

The Same Drug, a Very Different Price

Using claims from adults ages 18 to 64 with job-based coverage, EBRI reviewed 106 of the highest-spending physician-administered outpatient drugs, which made up about 77% of spending in that category. Hospital outpatient departments received higher payments for 93 of the 106 drugs, and the median per-unit gap was 64%, according to Becker's Hospital Review.

The difference becomes large quickly. The median yearly gap was $5,531 per patient, and for one cancer medication it reached $135,306. Around 59% of administrations took place in hospital outpatient departments, while 31% occurred in physician offices and 9% in other settings, including patients' homes.

Cancer drugs are among the costliest infused medicines, so even a relatively small percentage increase can translate into a major jump in plan spending for each patient.

The markup has narrowed, but it has not gone away. In EBRI's earlier review, the median hospital markup dropped from 98% in 2019 to 70% in 2024, largely because office payments rose. EBRI cited hospital acquisition of physician practices, stronger negotiating leverage, and facility fees as contributing factors.

"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, EBRI's director of health benefits research, 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 help ease cost pressure for workers and families over time.

Who Pays the Extra Cost

This is a claims-based comparison, not a clinical study, and it does not indicate that hospital treatment is inferior or unnecessary. It compares 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 benefit employers and health plans. Among the claims studied, 90% had no deductible payment, 80% had no coinsurance, and 97% had no copay. Patients using these expensive therapies often reach their plan's out-of-pocket maximum early, leaving most of the price difference with the insurer.

That does not mean patients are untouched; the burden mostly shifts in timing. People who begin treatment early in the year, change plans, or have high-deductible coverage may owe coinsurance on the higher hospital price before they hit their limit. For example, 20% coinsurance on a $4,000 dose equals $800, compared with $400 on a $2,000 dose. Over time, EBRI said, higher plan spending contributes to broader cost pressure on workers.

Location Can Influence Where Infusions Happen

Geography plays a role. An earlier EBRI analysis of state and metro-area 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 paying attention. 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, arguing that outpatient departments have costs that physician offices do not, including emergency readiness and a broader range of services.

What to Ask Before Your Next Infusion

Patients receiving infusions for cancer, autoimmune disease, or multiple sclerosis can take several practical steps. First, ask how the treatment 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 standard office.

Second, contact 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 in each setting. Some plans use site-of-care programs that direct stable patients toward lower-cost options. Ask whether such a program applies to you, whether prior authorization is required, and whether your infusion nurse or clinic would change.

Third, review your Explanation of Benefits after each treatment and compare the allowed amount from visit to visit. Do not change sites without your doctor. Patients with prior infusion reactions, complex regimens, or unstable conditions may need hospital-level monitoring, and that clinical judgment should come first.

The same medicine can cost much more depending on where it is given, and patients can ask about lower-cost options without sacrificing safety. Employer contracts and federal site-neutral proposals will help determine 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 the savings may mainly benefit the plan and, over time, workers through lower cost pressure.

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. Speak with your doctor first, since some patients need hospital-level monitoring.

Are lawmakers addressing this? Site-neutral payment proposals are being debated, and hospital groups oppose broad cuts.