What’s the deal with patient charges?
Fac t B ox
Costs vary from hospital to hospital in area
July 28, 2013
But that’s not all.
Financial loss
By MIKE REUTHER (mreuther@sungazette.com) , Williamsport Sun-Gazette
He said Geisinger also engages in unique services not normally available elsewhere, including what he called an overall
intensity of care.
Beyond that, Medicaid patients use 10.3 percent of the patient services provided, paying Susquehanna Health hospitals
only 51 percent of actual costs. That translated to a financial
loss in serving Medicaid patients of $16.1 million last year.
When a patient goes to a hospital for a procedure, treatment
or major surgery, chances are the first thing on his or her
mind is: Will I get better?
Costs may be the furthest thing from a patient’s mind - at
least until the bill arrives.
Most patients may be unaware that there can exist a disparity - sometimes quite large - between what different hospitals
charge.
The question: Why?
Average patient charges for chronic obstructive
pulmonary disorder at area hospitals are just one
example.
“We are about doing what’s best for the community,” he said.
What one hospital charges, he said, really is irrelevant.
Health care officials contend that because many patients are
covered by Medicare or a private insurer, they are not directly affected by what hospitals charge anyway.
But what about those who are uninsured?
Charles Santangelo, chief financial officer for Susquehanna
Those charges range from $7,281 at Evangelical
Community Hospital in Lewisburg to $41,115 at
Geisinger Medical Center in Danville.
For simple pneumonia and pleurisy, the patient
charges are as high as
Lock Haven Hospital spokesman Jeff Johns explained some of the reasons for that hospital’s seemingly inflated charges, at least with respect to some
other area hospitals.
Why charges vary
The U.S. Department of Health and Human Services recently released such data that reveals great
disparities among bills submitted from virtually every hospital in the nation for the 100 most common
treatments and procedures.
Medicare costs
Hospital officials claim that Medicare actually won’t pay
those charges anyway, but instead reimburses hospitals using
a system of standardized payments. Private insurers, meanwhile, often negotiate payments with hospitals.
Kevin Brennan, executive vice president of finance at
Geisinger Medical Center, said the charges listed in the
CMM report are not what Medicare normally pays.
Still, why, in many cases, are Geisinger’s charges higher than
those of other area health care institutions?
For a major joint replacement or lower extremity reattachment, Geisinger’s average charges are listed at $64,465.
For other areas hospitals the charges are: Williamsport
Regional Medical Center, $37,018; Evangelical Community
Hospital, $27,131; and Robert Packer Hospital, $29,737. Lock
Haven Hospital, a for-profit hospital owned by Community
Health Systems, does not perform such procedures.
“The programs that one agrees to take as part of its mission
are not uniform,” Brennan explained. “Geisinger undertakes
a teaching mission. They teach doctors. Many of those other
hospitals don’t have that teaching mission. We undertake
costs of mentoring students before they take on the responsibility of being a licensed doctor.”
Geisinger officials noted the health system provided $336.6
million in community support last year. That came in the
form of free, uncompensated care to patients who could not
afford to pay; the provision of care for the elderly
and the poor not paid by Medicare or Medicaid;
allied health, medical residency and fellowships;
health care research; community health; education;
and outreach.
Geisinger officials said uninsured patients won’t end
up paying a higher rate than those covered. Under
the Patient Protection and Affordable Care Act,
uninsured patients are entitled to either a discount
equivalent to that of Medicare or the one most commonly granted to insurers under contract.
$37,786 at Lock Haven Hospital and $43,290 at
Geisinger down to $27,073 at Robert Packer Hospital in Sayre.
The data from the Centers for Medicare and Medicaid Services shows that hospitals charge Medicare costs,
which can vary greatly, with seemingly no reason for the
disparities among the health care institutions.
“Susquehanna Health provided $24 million uncompensated
care in 2012, which includes charity care for those who do
not have insurance (self pay) and for individuals who do
have insurance, but who did not pay their portion of their
hospital bills (deductibles and co-pays),” Santangelo said.
“This is care for which we receive no revenue.”
Health, which includes Williamsport Regional Medical Center, said discounts are given to uninsured patients.
Payment plans
“We encourage our patients to contact our billing department to arrange a payment plan and reduce their charges,”
he said. “Those that never contact us continue to be billed
at full charges. If we write-off the balance to bad debt (send
balances to agencies) the full balance goes to collections. The
agency will then contact the patient to arrange for payment.
This policy has been in effect for about 10 years; Medicare
Program requires discounting for uninsured patients.”
Otherwise, Santangelo explained some of the patient charges
for Williamsport Regional Medical Center, calling it a “complex issue” with many contributing factors.
Susquehanna Health, a not-for-profit health care entity, has a
slim operating margin of just 2 percent, which influences the
charging structure, he said.
He said Medicare reimburses hospitals at a much less amount
than the cost for actual care.
“As a result, Susquehanna Health lost $30.6 million last year
treating Medicare patients; the reimbursement we receive
from the government only covers about 77 cents for every
dollar of our costs related to the care of these patients,” he
explained.
“Charges vary because each facility has a unique
mix of payers, patients and services. The average
charge for a service that was used by a small amount
of patients can be skewed by one or two patients
who developed problems that caused them to stay in the hospital for a much longer amount of time,” he said. “The setting
for a procedure can also make a difference. For example, our
hospital gives nerve block injections in an operating room
for safety while other facilities may do so in a treatment
room or a physician office.”
Johns added that hospital charges rarely reflect what they are
paid by either the government or private insurers.
Does Lock Haven’s for-profit status have anything to do with
its high patient charges?
“Both the national Medicare charge data and the annual Pennsylvania Health Care Cost Containment Council
(PHC4) reports show that tax status has nothing to do with
hospital charges or reimbursement,” Johns said.
Michael O’Keefe, president and CEO of Evangelical Community Hospital, released the following statement with regard
to the hospital’s patient charges: “As a hospital, fiscal responsibility and accountability are key factors in every decision
while keeping patient-centered care at the core of our services. We’re able to pass savings onto patients by carefully
controlling our costs and reinvesting in our staff, equipment
and facilities. The goal is always to give the best care while
keeping procedure charges affordable for the patient.”
Jersey Shore Hospital was not included in the report. As a
critical access hospital, it is paid differently by Medicare than
acute care hospitals.
Patient charge comparisons
Average patient charges vary from hospital to hospital across the nation.
Interestingly enough, disparities in charges are part
of the mix with area hospitals, according to a recent
Centers for Medicare and Medicaid Services report.
The following is a sampling of average patient
charges at area hospitals for a few procedures:
Level II Cardiac Imaging
•
•
•
•
•
Geisinger Medical Center, $7,193.
Robert Packer Hospital, $4,155.
Williamsport Regional Medical Center, $4,083.
Evangelical Community Hospital, $653.
Lock Haven Hospital, N/A
Level 1 Nerve Injections
•
•
•
•
•
Lock Haven Hospital, $4,177.
Robert Packer Hospital, $902.
Geisinger Medical Center, $878.
Williamsport Regional Medical Center, $716.
Evangelical Community Hospital, $619.
Spinal Fusion Except Cervical
•
•
Geisinger Medical Center, $99,255.
Williamsport Regional Medical Center,
$59,330.
• Evangelical Community Hospital, $43,440.
• Robert Packer Hospital, N/A.
• Lock Haven Hospital, N/A
SOURCE: U.S. Department of Health and Human
Services