WASHINGTON (WUSA9) -- For the first time, the federal government is releasing figures on what 3,300 hospitals charged, on average, for the one hundred most common inpatient services billed to Medicare and Medicaid in 2011.
There are major disparities in the prices on the hospitals' "chargemaster" lists, not only on a national level, but among medical centers in the same city.
For example, in regards to lower joint replacement surgery, a review of the new data by the Washington Post shows George Washington University Hospital charged, on average, almost $69,000. That is compared to Sibley Memorial Hospital's average charge just under $30,000 for the same procedure.
In Maryland, the Post found smaller differences in charges because of the state's unique system for overseeing hospital rates. The University of Maryland Medical Center in Baltimore has the highest average charge for lower joint replacement at $36,000, much less than the highest charges in other states. In fact, Las Colinas Medical Center near Dallas charges $160,832 for the replacement procedure.
Why the big disparities? The American Hospital Association says the charges aren't an accurate reflection of what most patients ever pay, and are left over from a reimbursement system that disappeared decades ago. The AHA says,
"There are many parts of the health care delivery and financing systems that urgently need updating, and the matter of "charges" is among those at the top of the list. Today, the Medicare program no longer negotiates hospital payment rates - it unilaterally sets them through annual regulations, resulting in payments that now average about 95 cents on the dollar of Medicare-allowable costs, according to the Medicare Payment Advisory Commission (MedPAC.)
In addition, large insurance companies negotiate rates with individual hospitals based on an array of factors, including each hospital's proposed rates, scope of services, and accessibility to and reputation within the community. It would create serious antitrust risks for hospitals to share the proposed or negotiated rates with each other. Variation in charges, therefore, is a byproduct of the marketplace so all parties must be involved in a solution, including the government. "
A statement from George Washington University Hospital echoed some of those same assertions. It reads: "The data released by The Centers for Medicare and Medicaid Services (CMS) does not reflect the amounts that patients pay for medical care provided. The 'charges' listed by the report are not the actual prices paid by patients, but instead reflect historical pricing structures of individual facilities based upon a myriad of factors. Virtually all prices for medical services are established and paid according to negotiated contracted rates with insurance companies or are established by Medicare and Medicaid. Payments are not based upon any hospital's "charge" structure. In addition, our hospital provides millions of dollars each year in uncompensated and charity care and has a discount policy available to all uninsured patients."
It is important to note that not all hospitals offer uninsured patients such discounts, and many are left to try and 'negotiate' a lower rate from the one on the chargemaster list. That is why many patient advocates have been pushing for greater transparency on hospital charges and reimbursements as part of healthcare reform.
You can find a full link to the CMS hospital charge data HERE.