On May 8, the U.S. Department of Health and Human Services (HHS) released hospital-specific charges and payments for the top 100 Medicare cases treated by all U.S. hospitals. A review of the data has caused some to question why there is wide variance in charges for the same type of discharge and whether a patient would actually pay the different price.
It is important to note that in Illinois the overwhelming majority of patients do not pay charges. Medicare and Medicaid pay hospitals substantially less than the cost to provide the care. Insurers pay based on individual contracts with each hospital and also pay substantially less than charges. Patients with health coverage only pay their insurance deductibles and co-pays as required.
Several years ago, Illinois passed landmark legislation – the Hospital Uninsured Patient Discount Act – to ensure that uninsured patients do not pay full charges and either receive their health care for free or have access to significant discounts. In addition, Illinois passed the Fair Patient Billing Act that standardized the billing and collection process and streamlined the financial assistance process for patients.
Every year, Illinois hospitals and health systems provide inpatient and outpatient services to nearly 900,000 uninsured Illinoisans who seek medical care, and to thousands more who are underinsured and need financial assistance. Hospitals provide $1.5 billion in care for which they receive no reimbursement.
Hospital charges vary due to sets of complex factors, such as the hospital’s local community, unique mission of care, different and unique services provided (e.g., trauma, neonatal intensive care, burn units, etc.), different populations served, and a range of different public and private payers.
In addition, the complexities of individual medical care, with individual items priced specifically to meet regulatory, legal and payment requirements, must be coupled with vast individual and regional differences in hospitals—from rural critical access hospitals to academic medical centers, community, city, suburban and specialty hospitals.
Illinois hospitals and health systems provide care to patients from every segment of society, every minute of every day, regardless of their ability to pay, their insurance status or their citizenship status.
Controlling costs is a top priority at hospitals across the state. They are actively engaged in many initiatives to coordinate care, reduce readmissions and unnecessary utilization and provide high quality care in the right setting at the right time for better outcomes, improved population health and lower costs.