The administration also highlighted varying charges within the same geographic area. For example, average inpatient hospital charges for services to treat heart failure ranged from a low of $21,000 to a high of $46,000 in Denver and from a low of $9,000 to a high of $51,000 in Jackson, Miss.
Few patients are charged the undiscounted rates, since Medicare and private insurers have their own discounted rates for care provided in hospitals.
“What hospitals charge and what they are paid are different things and the charges doesn't necessarily have a very strong relationship to the payments,” said Caroline Steinberg, vice president for health trends analysis at the American Hospital Association.
Steinberg blamed the higher charges on the effort by some hospitals to mitigate the financial impact of insurers demanding greater discounts on their standard charge lists, known as a chargemaster.
“But at the same time, federal regulations are tied to the chargemaster, so it is very difficult to actually make changes that lower your charges without affecting other parts of the system,” Steinberg said.
Jonathan Blum, director of the Center for Medicare at the CMS, discounted the likelihood that the differences in hospital charges are driven by variations in patients' health status, the provider's status as a teaching hospital or higher capital costs of some facilities.
“Those reasons don't seem very apparent to us,” Blum said in a call with reporters.
The impact of such large and varying prices for people without health insurance coverage has raised some concerns.
“Most perniciously, uninsured people are the ones who usually pay the highest prices for their hospital care,” Ron Pollack, executive director of Families USA, said in a news release. “It is absurd—and, indeed, unconscionable—that the people least capable of paying for their hospital care bear the largest, and often unaffordable, cost burdens.”
But Steinberg noted few uninsured patients pay the full undiscounted rate because the Patient Protection and Affordable Care Act required hospitals to implement a written financial assistance policy and to limit charges for patients qualifying for assistance to amounts billed to insured patients.
“So there really aren't very many people who get billed full charges and even fewer of those even pay,” she said in an interview.
The hospital trade group does not track how many people are charged the undiscounted rates. Steinberg highlighted the hospitals group's support for legislation sponsored by Rep, Michael Burgess (R-Texas) that would require the public release of what insurers and hospitals charge patients. However, hospitals generally do not support the release of rates for various procedures that they have negotiated with each insurer from which they accept payment.
“What we support is information that would be useful to consumers, so it would be what the consumers' obligation would be,” Steinberg said.
The new CMS data also showed wide variation in what Medicare pays hospitals for treating the same conditions. A CMS official blamed that variation, chiefly, on wide variations in the average morbidity of patients and local costs at different hospitals. Specifically, hospitals with sicker patients receive health status outlier payments and add-on payments based on the geographic location.
“So let's say one hospital is treating much, much, much sicker patients in a much more high cost area and they have a higher proportion of uninsured patients; yes, they would get paid more and they could be paid up to two or three times as much,” the CMS official said.
Those Medicare discounts appear unrelated to specific hospitals' undiscounted prices, the official said.
“There doesn't seem to be a real strong relationship between those adjustments that are made to Medicare payment rates and what the hospitals are actually charging,” the CMS official said.
The first-time release of the undiscounted hospital charges by CMS was paired with HHS expanding its efforts to encourage states to do the same. The agency announced $87 million in grants states can apply for to expand their collection and public release of provider charges and insurance rate information. More than 40 states require or encourage hospitals to publicly report information on their charges or payment rates.
Follow Rich Daly on Twitter: @MHrdaly
