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About Consumer Scope
1.) What does charge and cost really mean in regards to healthcare?
The hospital's charge does not include professional fees such as for a physician's or surgeon's services.
Average and median charges shown are based on data that hospitals submitted on their annual cost reports. For more details on the specific cost reports used for Consumer Scope™, see Database Information.
"Charge'' and '''Cost''' are not the same as '''expected payment''' '''Charge''' is the amount billed for a service. '''Cost''' is the amount of money the hospital spends on supplies and services to treat the patient. Cost does not include the hospital’s profit margin.
Because each case is different, a given patient's charge will not necessarily be the same as the average or median charge. The charge and cost information is the average for all patients for that particular procedure. Your specific charges will be based on specific circumstances surrounding your treatment.
The hospital's charge does not include professional fees such as for a physician's or surgeon's services.
Average and median charges shown are based on data that hospitals submitted on their annual cost reports. For more details on the specific cost reports used for Consumer Scope™, see Database Information.
No data is displayed if the hospital reported between one and four discharges for the selected service.
2.) What is facility charge?
The amount a facility bills for a patient's care is the charge. This is not the same as the actual cost to the facility, or the amount reimbursed by insurance. The amount collected by a health care facility for each service is almost always less than the amount billed. There are three common examples:
1. Government programs such as Medicare and Medicaid typically pay health care providers much less than the billed charge. These payments are determined by government agencies. Hospitals have no ability to negotiate reimbursement rates for government-paid services.
2. Commercial insurers or other purchasers of health care services usually negotiate discounts with health care facilities on behalf of the patients they represent.
3. Hospitals typically have policies that allow low-income persons to receive reduced-charge or free care.
3.) Where do you get your cost information?
The amount of money that a facility spends on supplies and services to treat a patient is known as the facility’s cost. Estimated cost information from each hospital is obtained from the following public data sources: HCRIS (Hospital Cost Report Information Systems) Files, All Payer state public data, and MedPar data.
HCRIS
– Each hospital that is certified to handle Medicare patients is required to submit to the Center for Medicare Services a very detailed series of financial and operational reports on an annual basis. The cost information in these reports includes and pertains to all services rendered at the facility, regardless of payer. These reports are developed and signed and attested to by the hospital CFO. CMS follows a very involved audit process to ensure the accuracy of these reports.
All Payer State Public Data
– Most states now require hospitals to submit inpatient information to a state agency. This data covers all discharges at the hospital, including Medicare, Medicaid and all private payers.
MedPar Data
– This is a national data set comprised of all Medicare inpatient discharge information submitted for payment to the federal agency that administers Medicare and Medicaid (CMS).
By law, providers must bill Medicare the same amount as the general public. Quarterly updates are made to Data iSight’s database to include the most recent files available from each source. The database includes 75% (or approximately 23 million) of all inpatient discharges in the United States over the previous 24 months.
4.) Why do charges vary for the same procedure or service?
There are many variables that impact hospital charges. These include:
Patient Severity:
Patients that are sicker or have multiple medical conditions generally require additional services, resulting in higher hospital charges.
Payer Mix:
Each hospital has a unique mix of payers. Government programs such as Medicare and Medicaid generally pay hospitals at rates less than the actual costs of providing care. Hospitals cannot remain financially viable if costs consistently exceed payments. As a result, hospitals that have a higher percentage of government-program patients must attempt to recover a greater percentage of their operational costs from privately insured and self-pay patients.
New Technology:
Hospitals with new technology may have higher charges than those with older equipment. The replacement cost for new equipment is typically higher than the original cost of the old equipment. In general, new technology improves patient care outcomes. In addition, it can result in patients receiving outpatient treatment rather than inpatient treatment which allows the patient to return to home, recover and assume normal, daily activities sooner.
Labor costs:
Salary and benefit costs vary by geographic region and are generally higher in urban areas. Shortages of nurses and other medical staff may increase hospital costs and impact hospital charges.
Range of Services Provided:
Hospitals differ in the range of services provided to patients. Some provide a full range required for diagnosis and treatment, including very specialized services. Other hospitals may stabilize patients and then transfer them to another facility for specialized care.
Social Mission:
Hospitals provide services to ensure access to health care in their community even when they lose money on those services. Rural hospitals may have lower volumes for services critical to their community. Hospitals must attempt to recover these costs from privately insured and self-pay patients through higher charges. These services vary by community, but some examples include burn centers, trauma care, obstetrics, high risk nurseries, poison control centers, medical education, services for the poor, 24 hour and 7 days a week availability, organ transplants, and other programs.
Health Care Safety Net:
Hospitals provide services to all patients that access the emergency department in regardless of their ability to pay. Some patients seek treatment at the hospital emergency department when they are unable to locate any other provider who accepts their insurance or if they lack insurance. Hospitals generally have charity care policies that provide assistance to patients in need that meet the requirements established by the hospital.
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