“Hospital Billing Varies Wildly, Government Data Shows” – The New York Times

By BARRY MEIER, JO CRAVEN McGINTY and JULIE CRESWELL | The New York Times

“A hospital in Livingston, N.J., charged $70,712 on average to implant a pacemaker, while a hospital in nearby Rahway, N.J., charged $101,945.

“In Saint Augustine, Fla., one hospital typically billed nearly $40,000 to remove a gallbladder using minimally invasive surgery, while one in Orange Park, Fla., charged $91,000.

“In one hospital in Dallas, the average bill for treating simple pneumonia was $14,610, while another there charged over $38,000.

“Data being released for the first time by the government on Wednesday shows that hospitals charge Medicare wildly differing amounts — sometimes 10 to 20 times what Medicare typically reimburses — for the same procedure, raising questions about how hospitals determine prices and why they differ so widely.

“The data for 3,300 hospitals, released by the federal Center for Medicare and Medicaid Services, shows wide variations not only regionally but among hospitals in the same area or city.

“Government officials said that some of the variation might reflect the fact that some patients were sicker or required longer hospitalization.

“Nonetheless, the data is likely to intensify a long debate over the methods that hospitals use to determine their charges.

“Medicare does not actually pay the amount a hospital charges but instead uses a system of standardized payments to reimburse hospitals for treating specific conditions. Private insurers do not pay the full charge either, but negotiate payments with hospitals for specific treatments. Since many patients are covered by Medicare or have private insurance, they are not directly affected by what hospitals charge.

“Experts say it is likely that the people who can afford it least — those with little or no insurance — are getting hit with extremely high hospitals bills that may bear little connection to the cost of treatment.

“‘If you’re uninsured, they’re going to ask you to pay,’ said Gerard Anderson, the director of the Johns Hopkins Center for Hospital Finance and Management.”

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