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Hospitals try ways to make cost data more meaningful

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A small step toward increased transparency in hospital pricing took effect this year, but it has not cleared up confusion over what patients can expect to pay for various procedures.

As a result, area hospitals are funneling patients to their own resources to offer a clearer picture.

A federal mandate required all U.S. hospitals this year to begin posting their standard charges for services on their websites, a list known as a charge master. But variables such as a patient’s insurance coverage and additional surgical costs can alter final price of hospital services.

“It’s not that we are unwilling to make our charges available to patients. It’s just that in this format, it’s not very useful,” said Rick Harley, vice president of treasury, management and revenue cycle at WellSpan Health, which is based in York Township and operates eight hospitals across Central Pennsylvania.

Harley said WellSpan’s approach has been to offer a form on the same webpage as the charge master for patients to request an estimate. WellSpan is working on a tool that would allow patients to get their own estimates but it is difficult to create a pricing tool given the health-plan variations even within an insurance company, according to Harley.

Navigating a charge master

Hospitals are required to make their list of charges available online but do not have to tweak the listings in any way – making navigation potentially difficult for patients.

Providers use the list of service costs – known as a charge master – as a baseline price before factoring in other costs and discounts. Because the charge master is made with hospital staff in mind – not patients— providers do not recommend using the list to calculate the cost of a hospital visit.

Typically posted on the pricing section of a hospital’s website, charge masters usually take the form of a downloadable spreadsheet. One spreadsheet can have over 10,000 separate services, each with their own price.

Searching for one service or surgery can take time, as hospitals may call the same thing by different names, which makes comparing costs even more difficult.

Both Penn State Health Milton S. Hershey Medical Center and Penn Medicine Lancaster General Health list private rooms for adults, with Lancaster General Health charging $3,144 for a room and Hershey Medical charging $3,388.

But no patient pays for only a room.

Other services might be added – reflecting the underlying reason for someone’s hospital stay – and the charge master does not necessarily explain what goes with what, area hospitals warn. In addition, a patient’s final bill can be affected by his or her insurance plan, as well as any copays, deductibles or coinsurance.

Most hospital websites, including UPMC Pinnacle Harrisburg, WellSpan York Hospital, Hershey Medical Center and Lancaster General Health, ask patients to look into their in-house estimating services, which account for variables that charge masters do not.

More specifics

The Centers for Medicare and Medicaid Services, a federal agency under the U.S. Department of Health and Human Services, updated its guidelines at the beginning of the year to include a requirement for hospitals to post machine-readable pricing information on the internet.

Prior to the update, hospitals were required to make charges available to patients, but the guidelines did not specify how they should be available.

“Too often this meant a list of charges that was available in print form from an administrative office or posted in a PDF that couldn’t be aggregated with other data,” Seema Verma, the agency’s administrator, said in a statement.

The list of charges, or charge master, includes every service or item with a price attached to it. The list doesn’t show what other charges can be billed to patients during a surgery, such as anesthesia or medicine, and it doesn’t take into account how much a patient’s health plan will cover.

“It’s a starting point, but not an ending point,” said Diane Hess, executive director of Central Penn Business Group on Health, a Lancaster-based nonprofit that addresses health benefits concerns for area employers. “If you undergo a surgical procedure, you still have a surgeon and anesthesia charge. All those charges are part of that one experience and are difficult to gather and put together as one price.”

Under the new requirements, hospitals need not only to make the information more accessible to patients by posting the information online, but must also post versions of their lists that are machine-readable.

Verma said third parties can use software to pore over the lists, take into account the variables in a hospital bill and give a better idea of the final cost.

“We set the stage for private third parties to develop tools and resources that are more meaningful and actionable than a list of codes and prices,” Verma said.

In their current state, local hospitals are finding it easier to draw patients away from the list, offering estimates to patients on their websites and contacting patients to talk finances.

WellSpan Health, UPMC Pinnacle, Penn Medicine and Penn State Health all have statements on their websites asking patients to look into getting an estimate versus reading the charge master. And they sometimes do even more.

Penn Medicine Lancaster General Health makes approximately 400 phone calls per month to patients who are expecting to pay out of pocket for upcoming procedures or surgeries, according to Mary Ann Eckard, public relations manager for the hospital, which is in Lancaster.

“A representative typically calls five to seven days before the scheduled procedure or surgery to ensure the patient knows what to expect financially, and that financial counseling is available,” Eckard said.

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Ioannis Pashakis

Ioannis Pashakis

Ioannis Pashakis covers health care and Lancaster County. Email him at ipashakis@cpbj.com.

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