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Chargemaster Data And Transparent Pricing

Stanley Feld M.D., FACP, MACE

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.

 Chargemasters include
thousands of hospital services, medical
, drugs, supplies, and diagnostic evaluations such as imaging and

item in the chargemaster is assigned a unique identifier code and a set price
that are used to generate patient bills.

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.

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

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.

 I believe the government should require
hospital systems to post prices that the government pays for services,
procedures and hospitalization

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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