This excellent NY Times article is based on Medicare data on over 3,000 hospitals nationwide for what they charged in 2012. The data shows that the prices that hospitals charge is highly variable and has risen across the board. The article correctly points out that these increases in charges do not necessarily affect what Medicare pays because Medicare is so large that they tell hospitals what they are going to pay them independent of what they bill.
By JULIE CRESWELL, SHERI FINK and SARAH COHEN – JUNE 2, 2014
Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials on Monday.
While it has long been known that hospitals bill Medicare widely varying amounts — sometimes many multiples of what Medicare typically reimburses — for the same procedure, an analysis of the data by The New York Times shows how much the price of some procedures rose in just one year’s time.
Experts in the health care world differ over the meaning of hospital charges.
While hospitals say they are unimportant — Medicare beneficiaries and those covered by commercial insurance pay significantly less through negotiated payments for treatments — others say the list prices are meaningful to the uninsured, to private insurers that have to negotiate reimbursements with hospitals or to consumers with high-deductible plans.
“You’re seeing a lot more benefit packages out there with co-insurance amounts that require the holders to pay 20 percent of a lab test or 20 percent of an X-ray. Well, 20 percent of which price?” asked Glenn Melnick, a professor who holds a Blue Cross of California endowed chair at the University of Southern California. “Some hospitals will charge 20 percent of what Blue Cross Blue Shield will pay; others will play games.”
Data released by the federal government shows that hospitals across the country charge Medicare differing amounts for the same types of cases. The data includes bills submitted in 2012 by 3,300 hospitals nationwide for the 100 most commonly performed treatments and procedures like hip replacement, heart operations and gallbladder removal, among hospitals that reported at least 11 cases.
Charges for chest pain, for instance, rose 10 percent to an average of $18,505 in 2012, from $16,815 in 2011. Average hospital charges for digestive disorders climbed 8.5 percent to nearly $22,000, from $20,278 in 2011.
In 2012, hospitals charged more for every one of 98 common ailments that could be compared to the previous year. For all but seven, the increase in charges exceeded the nation’s 2 percent inflation rate for that year, according to The Times’s analysis.
Experts say the increase in the price of some of the most common procedures may be offsetting rising technology or drug costs, declines in the number of patients being admitted to hospitals and a leveling out of reimbursements from Medicare. Between 2011 and 2012, Medicare increased payment rates by only 1 percent for most inpatient stays.
The number of patients admitted for chest pain under Medicare’s fee-for-service plans plummeted more than 28,000, to 107,224 in 2012, and inpatients with digestive disorders decreased more than 29,000, to 217,514.
Over all, the number of Medicare patients discharged from hospitals for the comparable 98 most common diagnoses dropped from 7.5 million to 7.2 million. The total amount Medicare paid for their care also declined somewhat between 2011 and 2012, from $62.8 billion to $61.9 billion.
In an effort to reduce overall health care costs, hospitals have been encouraged to admit fewer patients for conditions like asthma, for example, in favor of less expensive outpatient care.