Hospitals’ Prices for Common Services on the Rise

By Stephanie Armour, Christopher Weaver and Melinda Beck
June 2, 2014 7:58 p.m. ET

WASHINGTON—Federal data released Monday show an increase in the average price hospitals charge to treat common conditions, with vascular procedures and chest-pain treatment showing some of biggest upticks.

The numbers from the Centers for Medicare and Medicaid Services include 2012 prices at 3,376 hospitals for the 100 most common inpatient stays by Medicare patients. It is the second year the agency has released such data, and it reflects $57 billion in payments from Medicare, the federal insurance program for the elderly and disabled.

The data show what each hospital charges on average for individual services alongside the typically much lower rates Medicare actually pays, based on a set schedule of fees. Private insurers also negotiate their own reduced amount. ... However, the charge amounts can impact consumers because they can mark the starting point for private insurers' negotiated rates, and the uninsured can get saddled with charges that aren't discounted in the same way. Moreover, hospitals and other health providers that don't belong to insurers' networks sometimes bill people with private coverage for the balance of charges insurers don't cover.

More broadly, the data offer a window into wide variations charged by different hospitals for the same procedure. For example, in the Contra Costa County region of California, Kaiser Permanente's Antioch hospital charged $46,374 for joint-replacement services, while the highest-priced hospital in the area, NorthBay Medical Center in Fairfield, charged more than triple the price, at $150,953.

The data provided here include hospital-specific charges for the more than 3,000 U.S. hospitals that receive Medicare Inpatient Prospective Payment System (IPPS) payments for the top 100 most frequently billed discharges, paid under Medicare based on a rate per discharge using the Medicare Severity Diagnosis Related Group (MS-DRG) for Fiscal Year (FY) 2011 and 2012. These DRGs represent more than 7 million discharges or 60 percent of total Medicare IPPS discharges.

Hospitals determine what they will charge for items and services provided to patients and these charges are the amount the hospital bills for an item or service. The Total Payment amount includes the MS-DRG amount, bill total per diem, beneficiary primary payer claim payment amount, beneficiary Part A coinsurance amount, beneficiary deductible amount, beneficiary blood deducible amount and DRG outlier amount.

For these DRGs, average charges, average total payments, and average Medicare payments are calculated at the individual hospital level. Users will be able to make comparisons between the amount charged by individual hospitals within local markets, and nationwide, for services that might be furnished in connection with a particular inpatient stay.

Inpatient Charge Data FY 2012
Inpatient Charge Data FY 2011

For answers to any questions about the data, please see our Frequently Asked Questions page.

Inquiries regarding this data can be sent to MedicareProviderData@cms.hhs.gov.