Stanley Feld M.D., FACP, MACE
The chargemaster, or charge description master (CDM), is a comprehensive listing of items billable to a hospital patient or a patient's health insurance provider. It is published every year from billing data and payments.
Each item in the chargemaster is assigned a unique identifier code and a set price that are used to generate patient bills.
The impact of the chargemaster is such that those with good insurance pay the least for that care, whereas the uninsured, and others who pay out-of-pocket for healthcare pay the full chargemaster listed price for the same services.
There are multiple list prices for hospital services and one price the government pays. Some of the list prices are unconscionable. They are not tied to the cost of the service. A drug most often quoted is the price of an aspirin. An aspirin cost a penny a pill. Hospitals charge $45.
With the ubiquitous Internet, we as patients and we as physicians can easily look up what the hospital systems are overcharging for each service and procedure.
Both the list price and the price paid by the government’s for each hospital system is in the report. The government pays different hospital systems in the same area different prices. The reason for this is not transparent.
When I send a patient for a test in the hospital, I have no idea of what the test costs the patient. If I knew the prices and felt the patient was overcharged, I would sent the patient another hospital for that test.
There are two important issues to notice here.
1. Hospital systems are trying to buy physicians practices so physicians have no choice for his patients.
2.Hospital systems are trying to consolidate with other hospitals so physicians cannot send their patients to another hospital system.
3. The Obama government thinks this is a good thing. I think decreasing local competition is a bad thing for patients.
"The important issue will be for those folks that end up having to deal with chargemaster charges, which is the uninsured consumers,"
Chargemaster is "For them and their advocates, something to use in negotiation around how the cost of their care should be discounted."
It will not affect the insured who already have had prices negotiated by their healthcare insurance company. However, many consumers are going to be uninsured as companies drop it healthcare insurance coverage. Consumers might choose to go bare. All of a sudden prices will be forced to be transparent.
Something unfair is still going on. The average Medicare payment for people treated for respiratory infection and inflammation with major complex comorbidities ranges from $24,084 at the University of California San Diego Medical Center, to $18,862 at Sharp Memorial Hospital to $11,989 at Pomerado Hospital.
Treatment given in each hospital system is probably not different. The political connections are different.
These price differences go on all over the country.
The distraction from the politics in the chargemaster list price for the respiratory infection described above was as high as $133,347 at Sharp Chula Vista Medical Center. This difference between list price and paid price is absurd. Hospital systems search for the highest price they can get.
Medicare Advantage plan beneficiaries might find chargemaster very useful.
If they go to a hospital out of network they might find themselves liable for the entire retail price of the hospital charges.
The rules are unfavorable to Medical Advantage policyholders.
The Obama administration wants to eliminate the popular Medicare Advantage program.
The trick for Medicare Advantage patients is to go only to hospitals within the network for their plan.
“Joseph Fifer, President and CEO of the Healthcare Financial Management Association, says he thinks “hospitals should publish all of their charges for all of their DRGs on their webpages. And that will happen, he thinks, but it will take some time.”
Until now, he says, "hospitals didn't know what other hospitals were charging. The restraint of trade lawyers would put the fear of God into their chief financial officers saying, we can't find out what the pricing is at other hospitals for fear of (being accused of) anti-trust behavior."
This is a hollow excuse not to create transparent fees and to continue to confuse the public.
If a hospital system refuses to post its prices, the state government should withhold that hospital systems license until it does.
The alignment of incentives should alway be in favor of consumers.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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