Every hospital has what's known as a chargemaster,
also known as charge description master (CDM). A charge master is a
listing of every single procedure that a hospital may provide to its
patients. Wikipedia states that the chargemaster typically serves as
the 'starting point' for negotiations with patients and health insurance
providers of what amount of money will actually be paid to the
hospital. Unfortunately for many in dire medical straights who don't
understand hospital billing processes, they may be so overwhelmed that
they never think about negotiating with their healthcare provider
organization about their bill.
According to HospitalBill.Org, aside from Maryland and California, no state, federal or local law limits what hospitals can charge their patients. Hospitals are free to set their own prices, and each hospital does so in a complex document called the 'chargemaster'. It is well established that chargemaster prices are inflated, vary widely from hospital to hospital, and often have no relation to the actual cost of providing care.
Insurers, whether public or private, do not pay chargemaster rates. Instead, they negotiate discount rates with each hospital. They are able to do this because they have market power: they can direct patients away from hospitals that charge too much. Self-pay patients, on the other hand, are usually charged the full, inflated chargemaster price for hospital care, and have no leverage to negotiate a discount.
Time Magazine recently published a detailed article written by Steven Brill entitled "Why Medical Bills Are Killing Us". We recommend you take a few minutes to read it. Frankly, I never heard of a chargemaster until I read this article. It was an eye opener.
Why isn't there a standardized state or national chargemaster document? It seems like this would be a high priority project for the 'Open Health' community to tackle. Why not create a standardized national charge description master or chargemaster and make it available to the public as an 'open access' document? Why not create an 'open access' chargemaster system for use by all hospitals and clinics across the U.S.?
This is a call to action. If the industry or legislatures can't bring themselves to fix the problem, the 'Open Health' community in the U.S. needs to step up. Don't let current 'killer' medical billing practices continue. We can do better!
According to HospitalBill.Org, aside from Maryland and California, no state, federal or local law limits what hospitals can charge their patients. Hospitals are free to set their own prices, and each hospital does so in a complex document called the 'chargemaster'. It is well established that chargemaster prices are inflated, vary widely from hospital to hospital, and often have no relation to the actual cost of providing care.
Insurers, whether public or private, do not pay chargemaster rates. Instead, they negotiate discount rates with each hospital. They are able to do this because they have market power: they can direct patients away from hospitals that charge too much. Self-pay patients, on the other hand, are usually charged the full, inflated chargemaster price for hospital care, and have no leverage to negotiate a discount.
Time Magazine recently published a detailed article written by Steven Brill entitled "Why Medical Bills Are Killing Us". We recommend you take a few minutes to read it. Frankly, I never heard of a chargemaster until I read this article. It was an eye opener.
Why isn't there a standardized state or national chargemaster document? It seems like this would be a high priority project for the 'Open Health' community to tackle. Why not create a standardized national charge description master or chargemaster and make it available to the public as an 'open access' document? Why not create an 'open access' chargemaster system for use by all hospitals and clinics across the U.S.?
This is a call to action. If the industry or legislatures can't bring themselves to fix the problem, the 'Open Health' community in the U.S. needs to step up. Don't let current 'killer' medical billing practices continue. We can do better!
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