Thread: Medicare Reveals Hospital Charge Information

Medicare Reveals Hospital Charge Information

By David Pittman, Washington Correspondent, MedPage TodayPublished: May 08, 2013


WASHINGTON -- The Obama administration made public on Wednesday previously unpublished hospital charges for the 100 most common inpatient treatments in 2011, saying a similar release of physician data is on the horizon.
(CLICK HERE TO DOWNLOAD INFO) The massive data file reveals wide variation in charges for these 100 services listed in hospitals' "chargemasters" -- industry jargon for what hospitals charge. The data set represents added transparency the administration hopes will influence consumer behavior.
"Making this available for free for the first time will save consumers money by arming them with information that can help them make better choices," Health and Human Services Secretary Kathleen Sebelius said in a call with reporters Wednesday.
The data only include inpatient hospital services, but when asked about physician fees and other inpatient services, a top Centers for Medicare & Medicaid Services (CMS) official said those data could come later as the agency expands its price transparency initiative.
"We don't have a set timetable for expansion for this data release," Jonathan Blum, PhD, acting principal deputy administrator at CMS, said on the same call as Sebelius. "I think it is fair to say we intend to build upon this data release."
Blum said multiple times in his call with reporters that CMS will study the impact this information has on consumer behavior and what value the public places on it.
Journalist Steven Brill -- who wrote a March 4 Time magazine cover story on healthcare-pricing practices largely credited for CMS' action Wednesday -- said in a blog that Sebelius and CMS should next focus on outpatient services.
"The Feds need to publish chargemaster and Medicare pricing for the most frequent outpatient procedures and diagnostic tests at clinics -- two huge profit venues in the medical world," Brill wrote. "This will be harder -- the government doesn't collect that data as comprehensively -- but those outpatient centers and clinics provide a huge portion of American medical care."
A quick scan of the hospital data released Wednesday reveals wide variation for the same procedure in the same town.
For example, St. Dominic Hospital in Jackson, Miss., charged nearly $26,000 to implant a pacemaker while the University of Mississippi Medical Center across town charged more than $57,000 for the same procedure.
In Washington, the George Washington University Hospital charged nearly $69,000 for a lower-leg joint replacement without major complications. That same procedure cost just under $30,000 at Sibley Memorial Hospital -- a nonprofit community hospital 5 miles away.
A joint replacement ranged from $5,300 at a hospital in Ada, Okla., to $223,000 at a hospital in Monterey Park, Calif., CMS said.
"Hospitals that charge two or three times the going rate rightfully face greater scrutiny," Sebelius said.
Said Blum, "We're really trying to help elevate the conversation and continue the conversation and to ask questions why there is so much variation."
Common explanations for the varying costs -- patients' health status, hospital payer mix, teaching status -- don't seem accurate or clear from data CMS released, Blum said, adding that making such information public will help researchers, consumers, and others better ask questions and engage in debate over costs.
Opponents to such transparency note that chargemaster prices are irrelevant to most patients. Private insurance companies and Medicare negotiate their own prices with hospitals.
Instead, it's only the uninsured who face the prices on the chargemaster.
"Most perniciously, uninsured people are the ones who usually pay the highest prices for their hospital care," Ron Pollack, executive director of the liberal patient rights group Families USA here, said in a statement. "It is absurd – and, indeed, unconscionable – that the people least capable of paying for their hospital care bear the largest, and often unaffordable, cost burdens."
The American Hospital Association (AHA) said healthcare's "charge" system is a matter of financing that urgently needs updating.
"The complex and bewildering interplay among 'charges,' 'rates,' 'bills' and 'payments' across dozens of payers, public and private, does not serve any stakeholder well, including hospitals," AHA president and chief executive Rich Umbdenstock said in a statement. "This is especially true when what is most important to a patient is knowing what his or her financial responsibility will be."
The Federation of American Hospitals declined to comment.
　
　
http://www.medpagetoday.com/HospitalBasedMedicine/GeneralHospitalPractice/38992

2 hospitals, same procedure and a whole different price tag

4 hours ago • By JIM DOYLE jdoyle@post-dispatch.com 314-340-8372

What the data show

The federal Centers for Medicare & Medicaid Services made public on Wednesday data regarding hospital charges for 100 of the most commonly billed medical conditions and procedures for the elderly and disabled.

The huge database shows wide variation between hospital sticker prices — or "average covered charges" — for similar medical treatment, as well as significant differences between a hospital's list price and its reimbursement by Medicare.

For example, Mercy Hospital St. Louis's average covered charges for 42 patients in 2011 diagnosed with "infections and parasitic diseases (and who had) operating room procedure and major complications" was $189,868. Medicare's payouts averaged $47,129 for these cases.

Hospitals often use the so-called "charge master" as a starting point for negotiations with private insurance companies and to offer discounts to uninsured or under-insured patients.

The federal data base is available here.

The average sticker price to get a pacemaker at Des Peres Hospital is $74,953. About eight miles away, at St. Luke’s Hospital, it’s only $31,530.

That discrepancy between how two St. Louis-area hospitals price their services is echoed across Missouri and the United States in new data released Wednesday by the federal government.

The information, posted online by the Centers for Medicare & Medicaid Services, or CMS, focused on “average covered charges” for 100 of the mostly commonly billed medical conditions and procedures among the elderly and disabled, including the implantation of a pacemaker for a weak heart.

A hospital’s retail sticker price, or average covered charges, represents the dollar amount that hospitals bill for a particular service. Medicare, which pays a much lower rate, reimburses hospitals at rates that are closer to a hospital’s actual costs for delivering the care.

Check for yourself: Compare prices for some common procedures at Missouri hospitals.

At some Missouri hospitals, hospital sticker prices for certain medical conditions and procedures are more than 10 times the average Medicare reimbursement paid to that particular hospital for similar treatment. At many other hospitals statewide, the differential is often four or five times the Medicare rate.

Medicare rates are adjusted for regional differences in labor prices. A hospital may also be reimbursed at a higher rate for treatment if it manages a sicker population of patients or serves a disproportionate share of Medicaid and uninsured patients. Academic teaching hospitals and those hospitals with costly capital improvement projects also receive a higher reimbursement rate.

“The average Medicare patient is not going to pay these set charges, but patients who are uninsured or underinsured may be responsible for either paying the charge or negotiating the price downward from that high mark,” said Brian Cook, a CMS spokesman in Washington. “Each insurance company negotiates with each health system or hospital.”

Among St. Louis-area hospitals, those owned by Tenet Health Care Corp., a Dallas-based for-profit health care system, appear to have some of the highest average charges for fiscal year 2011 — the latest year available.

For example, Des Peres Hospital, a Tenet property, has one of the highest local sticker prices for pacemakers without complications, as well as for “major joint replacement with complications” ($103,813) and for heart attack care with complications ($62,017) — or, as the federal diagnostic code reads: “acute myocardial infarction, discharged alive with MCC (major complications).”

St. Louis University Hospital, also part of the Tenet chain, has the highest local sticker price for spinal fusion (excluding cervical fusion) with complications: $174,720. And its sticker price for “major small and large bowel procedures with complications” was the area’s highest, at $216,053 — a procedure that Medicare paid the hospital on average $50,663 for fiscal year 2011.

“The pricing is confusing and complex,” said Laura Keller, a spokeswoman for SLU Hospital. She said the federal data are somewhat misleading because the hospital established a policy several years ago not to gouge the uninsured.

Consumers weigh many factors in addition to cost when they seek medical care, she said.

“It may be more appropriate to choose a hospital based on a particular physician who specializes in what the patient is dealing with,” Keller said.

Chesterfield-based Mercy Health, a nonprofit Catholic health system, also has some of the St. Louis area’s highest sticker prices.

For example, Mercy St. Louis Hospital in Creve Coeur has the second-highest average covered charges in the St. Louis area for treating simple pneumonia with complications ($45,73, the third-highest sticker price for treating heart attacks with major complications ($55,55, and the third-highest for implanting a pacemaker without complications ($47,256).

“The cost of care represents the total cost of operating the hospital, not just the discrete services provided to individual patients,” Mercy said in a written statement. “Charges must also cover a portion of the cost of uncompensated care provided to patients, and the costs of staff and technology required around-the-clock to meet the needs of patients and the community.”

There are also price disparities among some hospitals that are owned by the same health system. Hospitals that frequently perform a procedure usually charge less for it, rural and urban hospitals have different cost structures, and federal adjustments may affect the actual amounts paid.

For example, Christian Hospital has some of the highest charges in the BJC system; Missouri Baptist Medical Center has some of BJC’s lowest charges.

“Some of the variations among BJC hospitals are a factor of history. Hospital charges were set long before BJC was formed ... 20 years ago,” said BJC spokesman June Fowler. “A hospital that serves a patient population where you have more uninsured or underinsured patients gets factored into charges” that are higher.

St. Mary’s Health Center in Richmond Heights, which is operated by Creve Coeur-based SSM Health Care, had the second-highest sticker price for pacemaker implants without complications ($54,239) in the St. Louis area.

“All of our hospitals have the same master charge list,” said SSM spokeswoman Kristen Johnson. “The difference we’re seeing between our hospitals is different case mixes, depending on a patient’s acuity level or co-morbidity, which will drive the costs up or down. Some people will have more severe needs and costs will reflect that.”

Gateway Regional Medical Center in Granite City had the St. Louis area’s highest average covered charges for patients diagnosed with simple pneumonia with major complications ($86,571) and patients discharged alive after a heart attack ($126,720). Gateway Regional officials were unavailable for comment.

Across the region, Poplar Bluff Regional Medical Center had some of the highest sticker prices.

Poplar Bluff, which is owned by Naples, Fla.-based Health Management Associates, had one of Missouri’s highest average sticker prices for a medical condition: $218,307 for “respiratory system diagnosis with ventilator support 96 hours plus.” According to federal data, Medicare paid that hospital on average $36,766 for 15 of those cases in fiscal year 2011.

“There’s a lot of factors that play into that charge piece,” said Tiffany Jenkins, marketing director for Poplar Bluff. “We’re not getting paid anywhere near that amount, and neither does any other hospital. ... The uninsured get a 60 percent discount at minimum.”

Jenkins said that several factors may result in Poplar Bluff’s higher average covered charges, which are used to negotiate the hospital’s managed care contracts. “We’re the only hospital that offers some of those service lines within 60 miles or more. We have a lot of uninsured in our area,” she said. “We live in an area that has a higher poverty rate.”

Jonathan Blum, a CMS deputy administrator, said the goal of releasing the data was “to make the health care marketplace more transparent,” to help the uninsured and “hopefully over time (to) reform a complicated marketplace.”

“Consumers and payers don’t always have data to make wise choices and to compare and contrast,” he said.

http://www.stltoday.com/business/loc...7035a80c3.html