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CMS Releases Hospital Pricing Data

   May 09, 2013

In a statement released late Wednesday by the American Hospital Association, Rich Umbdenstock, AHA president and CEO said "there are many parts of the healthcare delivery and financing systems that urgently need updating, and the matter of 'charges' is among those at the top of the list."

The Medicare program "no longer negotiates hospital payment rates—it unilaterally sets them through annual regulations, resulting in payments that now average about 95 cents on the dollar of Medicare-allowable costs," he added.

Umbdenstock says large insurance companies "negotiate rates…based on an array of factors, including each hospital's proposed rates, scope of services…accessibility and [community] reputation within the community. It would create serious antitrust risks for hospitals to share the proposed or negotiated rates with each other. Variation in charges, therefore, is a byproduct of the marketplace so all parties must be involved in a solution, including the government."

In addition to the unprecedented data release, Sebelius announced that HHS has made $87 million available to states to enhance rate review programs and to create a more transparent health insurance markets for their residents.

States may use the monies to fund pricing data centers to collect, analyze, and publish health pricing and medical reimbursement data in their area. Sebelius pointed to New Hampshire, where the state has a website of healthcare costs for a variety of procedures. "Residents can find the cheapest CT scan or MRI in their area in less than a minute."

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.

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