Hospital charges, including services such as nursing care and items such as bandages and medications, are set by the hospitals themselves. However, it is the Centers for Medicare & Medicaid Services (CMS) that decide how much a hospital will be paid when providing inpatient care to Medicare and Medicaid recipients. CMS payment allowances often are followed, or closely followed, by many healthcare insurers so CMS essentially sets the reimbursement payment bar in health care.
One of President Obama’s initiatives is making healthcare more affordable and accountable. To determine how U. S. hospitals compare, CMS aggregated data and has now has made this data available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html.
The data provide 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. These DRGs represent almost 7 million discharges or 60% of total Medicare IPPS discharges. The DRGs include common ailments, such as heart failure, COPD, joint replacement, diabetes, and renal failure. Commonly performed procedures, such as gall bladder removal, also are included in the list.The reported 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 and average Medicare payments are calculated at the individual hospital level. Users are able to make comparisons between the amount charged by individual hospitals within local markets, and nationwide, for services provided in connection with a particular inpatient stay. Healthcare commentators say that they expect the data to generate a lot of discussion and may assist healthcare consumers in “shopping around” to locate hospitals with lower charges, which translate to lower co-payments and other fees.