In an effort to increase health care system transparency, the federal Centers for Medicare and Medicaid (CMS) recently released U.S. hospital pricing data (called the “chargemaster”) for the 100 most common inpatient services in 2011. This is the first time that CMS has released this information, which demonstrates major differences in what most hospitals charge Medicare for the same procedure, even within the same city.
According to an Advisory Board Company article, the data cover 90% of Medicare inpatient claims filed in FY 2011, including 163,065 individual charges from 3,337 hospitals located in 306 metropolitan areas. Generally, it shows that hospitals submitted Medicare bills approximately three to five times higher than what the program reimburses for services.
The article notes that hospitals in California, Florida, Nevada, New Jersey, Pennsylvania, and Texas charged the highest average prices, while those in Idaho, Montana, and North Dakota charged the lowest. But, health care experts caution that these prices do not reflect what hospitals actually get paid by Medicare or most patients.
According to CMS Medicare Director, Jonathon Blum, the data do not explain why the variation in hospital pricing exists. Contributing factors may include patients’ health status and hospitals’ teaching status or capital costs, among others.
