Data Shows Large Increases In Hospital Charge Master Rates
Victor Lustig http://www.nytimes.com/2015/06/02/business/medicare-payments-billing-hospitals-doctors.html?ref=business&_r=1
Victor Lustig http://www.nytimes.com/2015/06/02/business/medicare-payments-billing-hospitals-doctors.html?ref=business&_r=1
“It has been common for hospitals to raise their Charge Master rates substantially every year in an effort to win higher reimbursement rates from health insurers.” Buying hospital care is like buying a new car; the sticker price has no relationship to reality and is an arbitrary number. It gives the provider of goods an advantage to … Continue reading Are Hospital Charge Master Rates Unreasonable?
In California, hospitals must publish their Charge Masters. Seems to us that hospitals can publish their prices like any other business – see sample Charge Master here: Sample Hospital Charge Master
An excerpt from trial records gives one a clue to hospital Charge Masters – “The total bill for Mrs. Doe’s hospital stay was $6,731.05. This amount was determined according to the hospital’s “Charge Master”, a confidential list of charges made by the hospital for all its goods and services, which is used to compute charges … Continue reading Hospital Charge Master – Basis for Cost Plus Pricing?
HOSPITAL: Our chargemaster says you owe us $229,112.13! PATIENT: But you told me I owed only $1,300! What’s a chargemaster? HOSPITAL: We make up absurd pricing so we can “negotiate” discounts with insurance companies like Blue Cross, United and all the rest. You’re not an insurance company. Besides, what’s a few extra bucks! Pay up! … Continue reading Ms. French vs Hospital Chargemaster
Hospitals are becoming increasingly proactive in updating their Charge Master’s and doing so on more than a quarterly or annual basis yet Hospitals Dismiss Significance Of Chargemaster Prices?
Victor Lustig “Percentage of savings fees is the greatest fraud foisted upon consumers since Victor Lustig sold the Eiffel Tower in 1925. To earn 24% of an inflated, arbitrary number that no one ever pays is better than robbing a bank.”
Victor Lustig Just like sticker prices on new cars, no one ever pays hospital chargemaster rates. So why have them? A previous blog posting (Hospitals Dismiss Significance Of Chargemaster Prices?) offers a possible reason, while the following article does too.
“I argue that the government needs to step in, not to take over responsibility for providing healthcare, but just the opposite, to eliminate the chargemaster pricing system…………”
Victor Lustig “Percentage of savings fees is the greatest fraud foisted upon consumers since Vicor Lustig sold the Eiffel Tower in 1925. To earn 24% of an inflated, arbitrary number that no one ever pays is better than robbing a bank.” – William Rusteberg
Victor Lustig By William Rusteberg Hospitals dismiss the significance of chargemaster prices? (See link to article below). That is totally misleading. Chargemaster prices are extremely significant and gives rise to a billion dollar business for intermediaries such as insurance companies, audit firms, law firms, claim re-pricers, and third party administrators. The scheme is tied up … Continue reading Hospitals Dismiss Significance Of Chargemaster Prices?
Time Magazine Article: A chargemaster of fees for procedures and medications exist for all hospitals and appears inflated and arbitrary, producing unreasonable profits. (Redacted) Memorial Hospital Response: By law, hospitals are required to maintain a uniform set of charges called the chargemaster. Patients are usually sent a copy of their bill wiich includes the fees … Continue reading Hospital Addresses Chargemaster Rates In Response To Time Magazine Story
Hospitals maintain a price list of services they provide, called a Charge Master. An interesting lawsuit (Hospital Charge Master) contends that a certain hospital’s charge master “is not an independent, objective, or verifiable means of determining charges.” According to the lawsuit, “hospital costs are marked up by a mathematical formula designed to produce a targeted … Continue reading The Mystery Behind Hospital Charge Masters – Is Pricing Enforceable?
“Your margin is my opportunity” – Jeff Bezos Reference Based Pricing vendors make millions off hospital Charge-Masters while at the same time throwing stones at the high cost of health care.
Turbocharge your chargemaster then offer payers 50% off double the price………..
I’m gonna make you an offer you can’t refuse. I’ll lend you $538 interest free if you give it back. Capisce? ………. Ok, sure, here’s $49 back, now we’re even. “Pssst Godfather! Even worse, the $49 is counterfeit manufactured by a chargemaster printing press!”
Article Referred By Lisa Behnke, M.D. Ms. French was sued by a hospital that had initially given her an estimate of $1,336.90 for a necessary back surgery only to later bill her $303,709.48, asserting that she had agreed to pay “all charges” billed by the hospital…………………..
World’s most ethical company has an important position to be filled in San Antonio, Texas. It involves revenue cycle management of one of the world’s largest hospital chains.
Victor Lustig Would’ve Approved! “None of us want to underfund a hospital that is providing legitimate services, but this borders on criminal.” – Michael Watson
SOURCE: www.medicaleconomics.com “Nearly two-thirds of our nation’s 5,000 hospitals, or around 3,900, call themselves nonprofit, a designation that allows them to avoid paying taxes.”
Transparency has revealed just how absurd the current contracting process is, and has in many ways caused more confusion and obfuscation……………….Costs could very likely rise in many markets as systems learn about higher prices being charged by their competitors – the definition of ‘unintended consequence………….
All across the nation, cities big and small are having their pockets picked and their communities decimated by their local nonprofit hospitals.
Reference Based Pricing Lawsuit Grabs National Attention “Few of us, when confronted with the threat, ‘Your money or your life! ’ would, like Jack Benny, pause and respond, ‘I’m thinking, I’m thinking.’ Most of us would empty our wallets. Does that act of acquiescence demonstrate acceptance of an offer and create a contract?”
A 50% discount off double the price? Or is it now a 50% discount off triple the price?
Hospitals Can Bypass New Price Transparency Rules For A Price Why are hospitals making all the fuss about the new price transparency rules announced by HHS? Instead they would be wise to remain silent and fund $300 per day ($109,500 per year) into their “Government Punishment Fund” as an additional cost of doing business. This … Continue reading Hospitals Can Win By Losing
“There is “sobering evidence” that the level of price transparency is actually getting worse…….
A client on Reference Based Pricing experienced first hand the magic of Charge Master rates and magical discounts………………………….
Hospitals create chargemaster prices by multiplying the cost they pay for a product by 300 to 1200%. Another little hospital secret is what is called an outlier payment…………………….
Making Money Off Medical Debt As Tenet and other hospital companies struggle to make money providing medical care, they are turning to the profitable and growing business of collecting debt…………….
The Texas Supreme Court has ruled that a hospital in Cypress, Texas, must disclose its negotiated reimbursement rates with public and commercial health plans as part of the discovery process in a suit filed by an uninsured former patient………………
“Percentage of savings fees is the greatest fraud foisted upon consumers since Vicor Lustig sold the Eiffel Tower in 1925. To earn 24% of an inflated, arbitrary number that no one ever pays is better than robbing a bank.” – William Rusteberg
“It’s Not My Fault They Read My Book!” Hospitals use fairy tale chargemaster pricing — which are shrouded in secrecy — to negotiate with third-party payers and generate revenue, yet Hospitals Dismiss Significance Of Chargemaster Prices?. A good negotiator, seeking maximum profits, always starts out high……Hospitals know the Art of The Deal…………..
If you are not getting 70-80% off billed charges you are getting screwed……………..This article proves the fallacy of hospital charge master rates which no one ever, ever pays……………
Sam Crafting, M.D. Sam Crafting 120 Hospital Contract For RiskManagers.us Plan Sponsors, are you trying to direct contract with your local hospital? Dr. Crafting’s boiler plate Hospital Agreement may be just what you need….………..
This is an interesting case with huge ramifications for Reference Based Plan Sponsors in Indiana and beyond. Hospital billed patient $625,000. A billing expert has determined the reasonable value of the services Parkview provided was $246,640, about 39 percent of what was charged in the case. Hospital must now disclose pricing methodologies in court…………………..
That first number thrown out there serves as an anchor — a first reference point. Every other price becomes an adjustment of that price. Take a hospital’s charge master rates for example………..
“There’s more price transparency and quality transparency regarding a refrigerator than there is about your heart surgery.”
By Bill Rusteberg A random sampling of hospital / facility claims incurred in the Lower Rio Grande Valley, Texas (The Valley) illustrates the crazy world of health care pricing strategies.
By: Peter Vieth April 22, 2016 For what may be the first time in Virginia, a judge has ordered a hospital to slash its “balance billing” charges by 75 percent to reflect the hospital’s usual write-off for uninsured patients.
“Hospital prices are almost completely irrational. They bear no relationship to the cost of providing the services, they are opaque, and the prices vary wildly among hospitals and payers.”
“Charge-master rates, in reality, serve as nothing more than the starting point for negotiations with the payer”……………….”The ‘full charges’ reflected on hospital Charge Masters are unconscionable”…………………..… “Hospital discounts mean nothing” – Bill Rusteberg
“We cannot in good conscience agree to terms that would increase the amounts our customers pay…….” – BCBSTX
Victor Lustig The scheme behind turbocharged hospital bills is to provide false value and hidden revenue streams………….a Victor Lustig wet dream
By Molly Mulebriar Recently I was asked to assist a speaker in preparing for a talk to be given to an audience of hospital administrators at their annual convention. The topic was “Why You Should Be Prepared For Direct Contracting with Local Employers.” So I wrote the following advice:
What other business can inflate their costs by 100% and still stay in business?
Some hospitals charge more than 10 times the Medicare rate, according to a new study published in Health Affairs on Monday. “…..the mystery of the chargemaster continues. “What other industry can you think of that marks up the price of their product by 1,000% and remains in business?” said co-author Gerard Anderson.”
Victor Lustig “Why didn’t I think of this!” THE FALLACY OF HOSPITAL CHARGEMASTERS “Hospital industry claims that the charges don’t matter because few actually pay the “list” price “defy common sense,” Burger said. “If there is no reason for the high prices, why bother charging them?” Burger asks. See Hospitals Dismiss Significance Of Chargemaster Prices?
Sam Crafting, M.D. Sam Crafting 120 Hospital Contract For RiskManagers.us By Bill Rusteberg Hospital contracts, if you can get your hands on one, may prove too complicated for most. Page after page of legalese followed by five or six pages of reimbursement schedules makes for dull reading. On occasion one will be delighted to discover … Continue reading Hospital Contracts Made Simple – 120% Method
By Molly Mulebriar Is Cost Plus Insurance in the process of formulating an offer to hospitals to end the impasse between hospitals relying on egregious charge master rates (Hospitals Dismiss Significance Of Chargemaster Prices?) coupled with phony “discounts” and willing payers seeking transparency and fair market value based on a competitive market as opposed to … Continue reading Cost Plus Insurance To Make Offer To Hospitals?
“………hospitals can no longer expect to get reimbursement from health plans in amounts well in excess of the actual value of services provided to plan members…………”
Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials on Monday. Editor’s Note: Hospital charge master rates are whatever a hospital wants them to be. These rates … Continue reading Hospital Charges Surge For Common Ailments
“We believe that providing charge data comparisons is introducing both transparency and accountability to hospital pricing, and we are continuing to pursue opportunities to report on hospital charging practices,” CMS said in its nearly 1,700-page rule. “1,700 pages? What else is in there?” – Homer G. Farnsworth, M.D.
By JULIE CRESWELL and REED ABELSONJAN. 23, 2014 Jacqueline Meyers says she was fired by a contractor after she refused to fire emergency room doctors who admitted fewer patients. Anne McQuary for The New York Times “While the lawsuits against H.M.A. provide a stark look at the pressure being put on doctors and hospital executives … Continue reading Hospital Chain Said to Scheme To Inflate Bills
According to Mike Dendy, CEO/President, Advanced Medical Pricing Solutions, “This lawsuit was brought by Dr. Bert Forman as a whistle-blower action, but once Insurance Commissioner Dave Jones reviewed the case, he immediately realized how important it was and the State of California exercised its right to intervene and join the suit. In my opinion, the … Continue reading Sutter Health Hospitals Agree To Pay $46 Million To Avoid Airing Secrets?
“When the dance between hospitals and health insurers began, if a hospital’s actual cost plus reasonable profit totaled $1,000 for a given procedure and the insurer demanded a 50 percent discount, the hospitals simply negotiated towards doubling the price from $1,000 to $2,000 in order to make it all work out……” “….today’s news is hardly … Continue reading Hospital Pricing Scam Exposed – Are Health Insurance Companies Complicit – 50% Discount Off Double The Price?
“We guarantee zero balance billing to our clients as part of our comprehensive medical claim administration services, guaranteeing that patients will never be hassled by a provider for additional funds.”
“The charge masters are totally irrational,” Robert Laszewski, a former health insurance company executive who consults for health care companies as president of Alexandria, Va.-based Health Policy and Strategy Associates, wrote in an email to The Huffington Post. Hospitals used to base prices on health care costs and on the need for profit that would, … Continue reading Transparency And The Fallacy of Charge Masters
For the first time, the federal government will release the prices that hospitals charge for the 100 most common inpatient procedures. Until now, these charges have been closely held by facilities that see a competitive advantage in shielding their fees from competitors.
In a press release issued this morning, Homer G. Farnsworth M.D., unveiled a new business plan wherein interested TPA partners can participate in a 12% fee of gross billed charges on every hospital claim that comes through their doors. “Our audit firm loves Charge Masters!” enthused Dr. Farnsworth. “Hospitals are our friends. Without them we … Continue reading TPA’s Invited To Participate In Lucrative 12% Charge Master Fee
“If you don’t like paying the Cleveland Clinic Medicare at + 50% they will bill you Medicare + 500% and sue you if you don’t pay. It is not a case that private insurance is happy with Medicare + 50%, they can’t afford Medicare + 500% which is the alternative. If hospitals had reasonable charge … Continue reading Ah, but it really is the ChargeMaster…………..
Everyone knows that cash makes a huge difference in health care costs. Without blinking an eye, one can get a medical provider salivating at the thought of cash – it’s worth at least a 50% “discount” off inflated health care pricing. Members of the 50% Club can attest to that – http://blog.riskmanagers.us/?p=7253 Employers who sponsor … Continue reading Patients Livid At Hospitals For Rewarding Cash Paying Patients With Steep Discounts
Recently a Texas based TPA negotiated a direct contract with a hospital, on behalf of one of their clients. Upon final review of the terms of the contract, the negotiator for the hospital said to the TPA representative, “We pay PPO’s, so what do we need to build in for you in this contract?” We have … Continue reading Do Hospitals Kick Back Undisclosed Fees to PPO Partners?
Negotiating fees with hospitals is a tough business. It’s like negotiating with a new car dealership for that $500 left front headlight on your new 2011 Chevy truck that you busted trying to run down a family of buzzards on FM 1427 on an idle Saturday afternoon. Some Texas employers have adopted a Cost Plus … Continue reading Hospital Objection #2
For the past several years many of our clients have moved away from a world of fantasy and make believe into a world of Common Sense, Logic, and Prudent Business Practices in the never ending search for fair and equitable health care pricing. We have met with numerous hospital administrators in an effort to negotiate fair … Continue reading Negotiating With Hospitals Is A Challenge To Logic And Common Sense
How can a “price” that is rarely paid be called a “price?” How can you have price transparency when what the industry clings to is an inflated price list that has little or no meaning as it relates to the actual bargained for price that is ultimately paid? And how can a consumer have … Continue reading How Can A Price That Is Rarely Paid Be Called A “Price?” Hospital Billed Charges Are Make Believe
Atlanta Journal article exposes huge hospital markups. A must read for those who blame insurance companies for the high cost of health care (Much like blaming the local gas station for the high cost of gasoline).
February 16, 2011 1:00 AM By FERNANDO DEL VALLE/Valley Morning Star HARLINGEN — Valley Baptist Health System will merge with a company that will inject money into the hospitals here and in Brownsville, to shoulder changes that result from national health care reform, and budget cuts, the company’s CEO James Eastham said Tuesday. The partner, … Continue reading Valley Baptist Hospital Announces Addition of Mystery Partner – Cites Cash Flow Needs
Massachusetts insurance companies pay some hospitals and doctors twice as much money as others for essentially the same patient care, according to a preliminary report by Attorney General Martha Coakley. It points to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs The yearlong investigation, set … Continue reading AG Finds Clout of Hospitals Drive Costs
One of our clients whose self-funded health plan is currently payng hospitals on a cost-plus basis, had an initial contact with a local hospital yesterday to discuss a possible agreement regarding hospital reimbursment methodology both sides could agree to. The hospital administrator started the conversation by saying that he was familiar with what the employer was doing … Continue reading Hospital Official Tells Us Cost-Plus is an Illegal Scheme
“It might be argued that because hospitals initially bill all of their patients at their chargemaster prices, they do not engage in price discrimination – the practice of charging different customers different prices for identical goods and services. Invoices at chargemaster prices, however, are insincere, in the sense that they would yield truly enormous profits … Continue reading Price Discrimination By Hospitals
The cost-plus method of paying hospital bills seems to make sense to many employers, with a growing number switching their plans from “secretly” negotiated PPO contracts to a fully transparent model. Cost savings achieved have been documented to be as high as 40% or more. Bill Miller Forbes Cost based pricing makes sense for several reasons. First, the method … Continue reading Cost-Plus Hospital Reimbursement Catches On – Employers Embrace Concept
Reference Based Pricing vendors rejoiced when a jury sided with a patient over an egregious hospital bill (Jury-sides-with-patient-in-hospital-bill-lawsuit/) But plaintiff’s attorneys were singing It Ain’t Over Til It’s Over………..
Will turning holiday parties into potluck events save MD Anderson from financial ruin? I don’t think cost shifting to employees is a viable solution.
Establishing and maintaining reserves is important for self-funded clients. Reserves are estimated based upon a number of factors. As medical trend increases claim costs, one must adjust reserve factors to compensate for the additional risk exposure.
“It doesn’t make sense until you understand that the giant hospital bills gave the PPOs an opportunity to profit from their repricing scam, charging for the extent to which they are successful in “discounting” these inflated bills.” Editor’s Note: Working the spread between Hospital Charge Master Rates and allowed amounts is how third party intermediaries … Continue reading If You Like Your Scam, You Can Keep It: the Attack on Out-of-Network Doctors.