Medical Billing: A Blind Walk In A Crowded Zoo?

medicalBillingMedical billing can feel like a blind walk in a crowded zoo for most consumers. They can walk into a pen and not know if they are going to encounter a lion or a bunny. In fact, they are walking blindly in a crowded zoo with all of the pen doors open because they can encounter any animal in any facility. That is, they can walk into a hospital and be charged $50,000 when another hospitals charge $5,000. They could even be charged significantly different rates for the same service in the same hospital than another patient. The difference between the hospital and the zoo is that most hospital patients never even know when they’ve been bitten.

In an attempt to bring sight to consumers, the United States Health and Human Services Secretary Kathleen Sebelius is releasing a “chargemaster” price vs. Medicare payment list for the 100 most common inpatient treatments of 2011.
Steven Brill addresses Kathleen Sebelius’ statements in the news-breaking article, “An End to Medical Billing Secrecy?”. He defines “chargemaster” prices as the listed prices for services. In a separate article, “Hospitals Dismiss Significance of Chargemaster Prices“, Ron Shinkman goes so far as to define them as “internal price lists…used as a basis to extract far higher payments from uninsured patients…” Obviously, Steven Brill shares his sentiment as he discusses the disadvantageous billing procedures for uninsured patients.

Price Vs. Cost

The release of billing chargemaster prices vs. Medicare payments is significant for several reasons. First, it shows the extreme difference between hospital price and actual cost. This information is significant in the qualifications of nonprofit hospitals. Second, it brings to light the drastic price difference between hospitals for the same services. In other words, it could bring more price competition to the medical market. Third, it will spurn further data collection and market and consumer action.

But, Kathleen Sebelius and her team are already thinking ahead. They are offering money to would-be data collection centers to expand current data with the future goal of expanding data type. Strategies for gathering this information are also being discussed. That’s good, because Sebelius’ project will certainly run into significant obstacles. For one thing, no hospital will want to make their actual billing prices public. Insurance companies will be just as stingy with their documentations. On the one hand, companies paying lower rates won’t want to share their advantages. On the other hand, companies paying higher rates won’t want to suffer professional embarrassment. The only option left is bill-copy submissions from consumers. Sebelius suggests that patients may be more willing to do this if their name is kept private. She has also offered the same deal for insurance companies, but no one is holding their breath.