CHA News Article

CHA Responds to Release of CMS Data on Average Medicare Charges

As information appeared in newspapers and journals across the country yesterday about hospital Medicare charges released by the Centers for Medicare & Medicaid Services (CMS), CHA released a statement to California news media helping to explain some of the issue’s complexities. CMS, in collaboration with the Association of Health Care Journalists, released data on the 100 most common DRG charges for Medicare patients. However, due to the nature of payment systems, the data may be confusing to patients and the general public, and is less relevant when considered alongside other policies.

“The current hospital pricing and payment systems weren’t designed for individual patients to receive bills directly,” said CHA President/CEO C. Duane Dauner in the statement. “Rather, they have evolved since the enactment of Medicare in 1965 into what is often a convoluted list of charges for every item or service. Federal Medicare policies have created perverse incentives for hospitals to set their charges high so that they can recoup a portion of their losses on the most complex, costly Medicare patients (known as outliers).”

The CHA statement also explains that, in California, uninsured patients earning up to 350 percent of the federal poverty level already receive either free or discounted care, with the discounts based on what government programs would pay.