HOPD (Hospital Outpatient Department)

An HOPD is an outpatient service department owned by and physically or administratively attached to a hospital. Even though the procedure is same-day and the patient goes home, the facility is billed as part of the hospital, which typically means significantly higher reimbursement rates than a freestanding facility performing the same service.

The HOPD-versus-ASC price gap is one of the most durable pricing anomalies in American healthcare. Medicare pays HOPDs about 80 to 100 percent more than ASCs for the same procedure code; commercial plans follow the same pattern, often with even wider spreads. A screening colonoscopy might carry a $650 negotiated rate at an ASC and a $2,800 negotiated rate at an HOPD — same procedure, same equipment, same 30 minutes of physician time. Hospital consolidation has accelerated the shift of independent physician offices into HOPD status through acquisition; when a hospital buys an independent imaging center or GI practice, the facility can rebill at HOPD rates the next day, doubling or tripling the price to the plan.

The takeaway: when a plan pays a claim at an HOPD, verify it needed to be there. For screening colonoscopies, standard imaging, minor orthopedic work, and routine outpatient surgery, an ASC or freestanding center is almost always the lower-cost path.