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2012 Medicare Data Shows Wide Swings in Hospital Charges

By John Reichard, CQ HealthBeat Editor

June 2, 2014 -- Although hospital charges for the most common inpatient procedures didn't spike in 2012, there were wide geographic variations in the prices set for the same procedure even within the same markets.

Federal officials have released a second installment of data reflecting what hospitals charge for the 100 most common Medicare inpatient stays, following up on last year's release of 2011 data.

Charges rose in 2012 but by less than 5 percent for most of the procedures studied, according to a fact sheet issued by the Centers for Medicare and Medicaid Services (CMS). Charges for services to treat chest pain saw the largest increase, growing by almost 10 percent.

The CMS figures are a de facto sticker price for hospital care. Just as in car sales, few buyers actually pay that price because they can often negotiate a better deal. The bigger the payer, the better the deal; thus Medicare and Blue Cross Shield plans pay substantially less than the sticker price. But there are exceptions. In some instances, the uninsured, with no individual negotiating power, have had to pay posted prices.

Another area of increase was for a payment category called "circulatory disorders except acute myocardial infarction with cardiac catheter and major complications or comorbidities." Nationally, charges rose 6 percent from $61,7000 to $65,600, according to the analysis of data for some 3,000 hospitals. In Manhattan, average charges increased from $72,500 to $87,100—an increase of 20 percent, the CMS document noted. Three of the 10 hospitals in Manhattan largely accounted for that jump.

More dramatic than price changes were price disparities. Average inpatient charges for services associated with joint replacement ranged from a low of $15,901 in Baltimore to a maximum of $239,138 in Los Angeles. The national average was $50,132.

Swings were observed within the same city. So in Newark, New Jersey, treatment for heart failure ranged from $32,750 to $142,000.

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