How is it that a "major and small bowel" procedure at National Park Medical Center in Hot Springs is billed at an average $333,470, but only $19,740 at St. Bernards Medical Center in Jonesboro? Or that "infectious and parasitic diseases with OR procedures" are billed at $257,369 at National Park and $44,446 at St. Bernards?
The Centers for Medicare and Medicaid Services put the spotlight on the arbitrariness of hospital billing — a subject explored at length last year in a Time magazine cover story by Stephen Brill — last week by publishing a database of average billing and Medicare payments at 3,337 American hospitals, including 42 in Arkansas. It's the first time such information has been made public to American consumers.
The relationship of what a hospital may bill, based on its charge sheet, to what it is paid is so out of whack that, at least in one case we turned up, the hospital that charges the least receives payment higher than the hospital that charges the most (see Northwest Arkansas Hospitals and St. Bernards under Major Cardiovascular Procedures below as an example).
What the figures don't show is what uninsured persons are paying for hospital procedures. Hospitals may offer discounts to the uninsured — National Park Medical Center, for example, reduces its charges by a "minimum of 60 percent" to the uninsured, its spokesman said — but thanks to reimbursement agreements with insurance companies, the uninsured are billed at a higher rate than the insured. If their condition isn't an emergency, they should shop around.
Below are more examples of the variation in average charges and Medicare payments in Arkansas for more common procedures.
Mandy Golleher, spokesman for National Park, whose charge prices are the highest in several instances, said this about the wide charge variations: "It is important to understand that hospitals only collect a small percentage of our charges, or 'list prices.' We are required to give Medicare one level of discount from list price, Medicaid another and private insurers negotiate for still others. Strange as it may seem, if we did not start with the list prices we have, we would not end up with enough revenue to keep the doors open. Additionally, much of what is not collected is the result of providing charity care or care that is otherwise uncompensated. For most hospitals, this is millions of dollars per year."
You can find the CMS data at www.cms.gov.