CMS Data Shows Hospital Charges Vary Significantly

At Upper Chesapeake Medical Center in Bel Air, Md., the average Medicare charges for a major joint replacement with major complications and comorbidities totaled a little more than $23,000. At Crozer Chester Medical Center in Upland, Pa., a roughly hour-drive east, the average charges for the same procedure cost almost $322,000.

In an effort to increase price transparency across the healthcare system, HHS and CMS released data — such as the above example — on the top 100 most frequently billed inpatient discharges for the 3,000-plus hospitals that are paid under Medicare's inpatient prospective payment system. The data, which come from fiscal year 2011, represent roughly 7 million discharges, or 60 percent of all Medicare IPPS discharges.

In addition, HHS said it will dole out $87 million to states to create data centers, which will aim to beef up hospital rate review programs and post healthcare pricing and reimbursement data.

"Currently, consumers don't know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city," HHS Secretary Kathleen Sebelius said in a news release. "This data and new data centers will help fill that gap.

The data vary wildly among hospitals across the country. Medicare charges for major joint replacements without complications or death ranged from a low of $5,304 at Chicksaw Nation Medical Center in Ada, Okla., to a high of $223,373 at Monterey Park (Calif.) Hospital. Routine implants of pacemakers ranged from a low of $15,128 at Peninsula Regional Medical Center in Salisbury, Md., to a high of $167,628 at Vista Medical Center East in Waukegan, Ill.

What hospitals bill Medicare also varies significantly in the same geographic area, as the first example shows. In Houston, hospitals charged a low of $8,815 to a high of $41,576 for inpatient treatment of pneumonia.

The federal government's move comes as the healthcare price transparency movement in the U.S. hits a tipping point. Earlier this year, journalist Steven Brill wrote a 36-page investigative report for TIME that covered the hospital and health insurance market and why healthcare costs are so high. In a new post, Mr. Brill wrote that a CMS spokesperson told him the announcement of the hospital billing data is partly in response to his article.

More Articles on Hospital Price Transparency:

Price Transparency: Why It's an Issue & Where Hospitals Fit in
Will Hospital Price Transparency Drive Up Healthcare Costs?
AHA Supports Bill That Would Require Hospitals to Post Prices

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