While the Affordable Care Act places a cap on the amount non-profit hospitals can charge low-income patients, the law does not place the same restriction on for-profit hospitals. That is, non-profit hospitals cannot charge uninsured patients rates higher than what they generally bill insured patients. Generally, non-profits must limit charges to Medicare rates, the rate of its lowest-paying insurer or an average of its three lowest-paying insurers.
According to the report, the hospital industry says high markups are necessary to help struggling facilities provide state-of-the-art care. In addition, when for-profit hospitals accept Medicare and Medicaid patients, they sustain a loss that must be offset with higher markups for other patients.
The report provides an example of how significant these markups can be. According to an analysis of hospital financial data by the Atlanta Journal-Constitution, markups for hospitals in metro Atlanta ranged from 157-702 percent over contractual rates in 2009. The highest markups for Atlanta hospitals have more than doubled since 1999.
Experts point out that the increase in hospital markups is not just a consumer issue. The trend also contributes significantly to inflation of medical costs. In response, insurance companies such as Aetna are asking hospitals to decrease markups and profit instead through efficiency.
Read the Atlanta Journal-Constitution report on hospital markups.
Read more on hospital rates:
–10 Hospitals and Health Systems in Recent Disputes With Payors
–Inflation in Health Benefits Highest Since 2004; Deductibles Reach $1200
–Rhode Island’s Lifespan and Blue Cross Enter Into Bundled Payment Contract
