Posts Tagged chargemaster

Legal Loopholes — patient bankruptcy



Again, Steven Brill of Time Magazine twists the knife in the hospital chargemaster with his article “Bungling the Easy Stuff” published 12/16/13.   Uninsured patients continue to suffer hospital price gouging and personal bankruptcy  even though legislative relief was passed years ago when the Affordable Care Act was enacted.

Mr. Brill explains that the ACA prevents hospitals from collecting fees based on the chargemaster (the discredited fee schedule of astronomic charges).  But, because no rules were published in the Federal Register no legal help is available to victims of the practice.

How could this happen?  Because the work to implement the rules to prevent overcharging did not seem worth the effort, after all, in 2014 everybody will have insurance!  Sadly, during the 4 years up to the time when everybody supposedly will have insurance legal enforcement was sidelined.

Although Mr. Brill piles blame on the Obama administration one must also blame those in congress who pass bill after bill to try to stop the ACA — this is unbelievable — one side not implementing the law and the other side trying to kill the law both without regard to the finances of the vulnerable uninsured while hospitals ignore the will of congress and continue an unethical practice.

Mr. Brill has been hammering on the problems of the chargemaster.  It’s time to listen and help your fellow citizens — hospital boards need to stop the practice immediately.  Citizens need to ask hospital board members why they stand for such a cruel and unethical practice?  Perhaps they should give the money back.  However, the current plan is to use the money to buy ads to extol the caring nature of hospitals — that will make us all feel better.

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The Chargemaster Strikes Again — data from CMS

color cash register

Two days ago the Centers for Medicare and Medicaid Services (CMS) published    the fees hospitals charge uninsured patients.  These fees are called the “chargemaster” of the hospital.   Hospitals point out that most people have some type of coverage.  That is true.  But, 50 million people do not have insurance and the fees apply to them.  The following are the statistics for Colorado hospitals for which CMS presented data on the charges for heart attack.  The column in pink is the amount charged and the MC Allowed column is what Medicare has calculated as a fair payment.

Hospital Charges Colorado

Hospitals are businesses and can charge what they wish for services.  Except, many hospitals are “not for profit“; which means the money they would normally need to pay in taxes is instead used to benefit the community.  They often prove that benefit by writing off the money they can not collect from people who lack  insurance.

The unfortunate effect is that hospital charges are the number one cause of bankruptcy.  Furthermore, the extreme penalty of the “chargemaster” for people without insurance drives people to purchase insurance — certainly a happy situation for insurance companies.

If you go to any health insurance web site you can see what the “chargemaster” penalty actually is.  Look at the charge for the highest deductible policy.  That charge, in large part, is the fee to benefit from  insurance company negotiations with hospitals.  Of course, the hospital makes the charge very high so any mark-off for insurance companies is just for show.  This is an old retail game — raise the price 100% then have a 50% off sale.

A simple solution:

If the charges by hospitals were restricted by law not to exceed 20% above the fee allowed by Medicare the cost of insurance would be substantially less.  And, people who select a high deductible plan could really enjoy low rates with protection from the cost of catastrophic illness.

It is important to note insurance reform will NOT solve the US problems with high cost and low quality health care.  Insurance just distributes financial pain over a greater number of people.  The solution is to fix the underlying problem not distribute the problem to more people.

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