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How Chargemaster Data May Affect Hospital Revenue

Cheryl Clark, for HealthLeaders Media, May 21, 2013

It enables real comparison of prices at less expensive hospitals, and begging justification for much higher charges. "I think what this will do is eventually get regional areas together on what the cost really is," he says.

In California, state law says the uninsured who earn less than 200% of the federal poverty level should not see a hospital bill because for those patients, hospitals write off the charge as charity care. Release of the chargemaster data won't mean that much to them no matter what.

But people who earn between 200% and 350% of the federal poverty level have to pay what is referred to as "the government payer rate," usually what Medicare pays. For a two-person household, that means an income of between about $31,020 and $54,285 a year.

And people who earn above 350% but below 500% of the federal poverty level pay 140% of Medicare, or 40% more than what Medicare would pay for that procedure.

In Knoll's area of San Diego, as in most parts of the country, the government payer rate, or Medicare rate, for various diagnostic related groups (DRG) shown on the charge master, is highly variable.

For example, the average Medicare payment for people treated for respiratory infection and inflammation with major complex comorbidities ranges from $24,084 at the University of California San Diego Medical Center, to $18,862 at Sharp Memorial Hospital to $11,989 at Pomerado Hospital.

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