Are Chargemasters Making Medical Billing More Transparent?

Medical Billing Statement For Chargemasters

When it comes to a trip to the hospital we all know costs can add up quickly, but do you really know exactly what you’re paying for?

Well, since January 1, a federal regulation has required hospitals to post machine-readable documents detailing everything they charge for called chargemasters.

Though a debate has been raised into whether theses chargemasters are actually making medical billing more transparent.

From sliding scale costs to deductibles to negotiable prices between insurance companies and providers, the calculations of the price you pay for a visit to the hospital is far from black and white.

As for the chargemaster documents themselves, they’re often hundreds of pages long and filled with coded medical descriptions that are indecipherable to the average consumer.

For these reasons, Dr. Rishi Batra, a professor of law from Texas Tech doubts the practical use of a chargemaster to the average patient.

“So given the length of these chargemasters its difficult to even determine what a patient might pay for a particular procedure because any given operation, any given treatment is going to involve multiple parts or procedures that are listed individually on these chargemasters,” said Batra.

On top of that, even if you were able to determine the specific charges you would need for a treatment, the chargemaster doesn’t necessarily represent prices that you would pay.

“Most individual consumers that have health insurance, the insurance company has already negotiated a usually much lower price that appears on the chargemaster, and the patients without health insurance can also pay a much-reduced price from the hospital,”

So what causes this entangled web of cost and actual price paid? Dr. Batra believes its a direct effect of a lack of transparency in information.

“Part of the problem is when you go to the grocery store to buy an apple you’re the one directly paying for the apple, you don’t have an apple insurance company buying apples on your behalf. When you add a factor of a portion of the money being paid by a third party that makes things more complicated, because those third parties are competing to keep prices down but they also don’t have information on what their competitors are paying, so prices can greatly vary,” Batra.

These factors all coupled together have led Dr. Batra to the conclusion that chargemasters can’t help the average consumer, but he that doesn’t mean the documents aren’t a step in the right direction.

“So, I think CMS does have the authority and certainly could pass a more stringent regulation that says that hospitals must provide this information in a more consumer-friendly format, then the government itself could actually collect this data and publish it in a way that consumers could use. So they actually could compare and contrast prices if they were able to do so for some of these procedures,” said Batra.

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