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Doctors Hospital tops in charges but Georgia Regents Medical Center gets most pay, data shows

Wednesday, May 8, 2013 6:55 PM
Last updated Thursday, May 9, 2013 12:58 AM
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Doctors Hospital generally had the highest charges among Augusta hospitals for common procedures, including the highest charge for a procedure in Georgia, while Georgia Regents Medical Center received the highest Medicare payments as a result of extra funds for teaching and treating more low-income people, according to data released Wednesday by the federal government.

Officials with the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services said their hope was that releasing hospital charges and what Medicare actually paid would provide transparency and show the wide variation in charges not only across the country but even among local hospitals. But hospital finance officers said the charge system really is “idiosyncratic,” often with tradeoffs to maximize some business and take a loss on other services within a hospital, so charges won’t make much sense or prove useful for consumers, who generally don’t pay those charges anyway.

The federal agencies released average charge and Medicare payment for the 100 most common inpatient procedures for 3,400 hospitals across the country. What they found was a “vast variation in charges” not only between different places, with charges for the same procedure as much as 20 times higher in some hospitals than others, but also great variation even among local hospitals, said Jonathan Blum, the deputy administrator for CMS.

“The extent of the variation doesn’t support the reasons” providers gave for the big differences, he said. While acknowledging that most don’t pay the charged rate, it does apply for many patients, said Brian Cook, the director of the Media Relations Group at CMS.

“For those who are uninsured, those who are underinsured, they may be responsible for charges that are five-six times what Medicare pays, even more than that,” he said. “While they may be negotiating with hospitals to come down from there, the starting point is also much, much, much higher than what Medicare would consider to be an appropriate charge.”

On most of the procedures for which charges were listed, Doctors was the highest among Augusta hospitals, often significantly higher. Its $342,443 average charge for treating major infections with surgery and major complications was the highest charge of any listed in Georgia. Doctors e-mailed a response Wednesday evening that did not directly address the higher charges but said that “what patients pay has more to do with the type of coverage they have than charges.” Those without coverage are eligible for the hospital’s charity care program or could receive discounts, the statement said.

That Doctors would be higher was not surprising to officials at other Augusta hospitals.

“You would see that in almost every instance of an HCA hospital,” Doctors’ parent company, said Greg Damron, the chief financial officer for GRMC.

Doctors is usually “aggressive” in how it sets its charges, said Dave Belkoski, the chief financial officer for University Hospital.

Both agree, however, that no one pays those charges.

“Charge is not relevant,” for the consumer, Belkoski said. What would be more useful would be finding out the negotiated payment an insurance company might have set with different institutions, he said.

Often times within a particular hospital, how it arrived at a particular charge might be “idiosyncratic” to that institution, Damron said. A hospital that does a lot of a particular kind of procedure might set charges for that higher, while those for others are not raised, he said.

“You’re going to try to place charges in places that are going to maximize reimbursement, particularly from the managed care payors,” Damron said. “You’re trying to create revenue streams.”

And those charges might have been raised or lowered based on negotiations to maximize volume in key areas, Belkoski said.

“You ask for more on cardiac and you take less on (obstetrics) just so you can get all of the cardiac business,” he said.

What a hospital charges really wasn’t designed to be consumer friendly, it was to respond to government and commercial insurance reimbursement demands, Damron said.

“It’s not like going to Home Depot and buying a wheelbarrow,” he said.

Officials are hoping that providing a look into the system will help “reform a complicated marketplace,” Blum said. And both Damron and Belkoski say greater demand from patients for cost comparisons, particularly in light of reforms from the Affordable Care Act, will help push more consumer-friendly price comparisons in the future.

As for Medicare payments, Georgia Regents is always higher than others in Augusta because it gets extra payments to cover the costs of teaching and training residents and extra payments for seeing a higher number of low-income people, Damron said, which pushes up its total payment numbers.

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IBeDogGone 05/08/13 - 07:56 pm
Cost Reports

I could not get the link to work to allow me to see all of the data for each hospital so I am making my statement based on the article alone. Any facility or physcians office should know that Medicaid and Medicare supplements are available based upon your cost report. I can assure you any facility such as GRMC knows that this is where additional revenue is collected. I have managed FQHC sites in several states and I know that is where we have to focus to collect most of our Revenue Cycle Management extra income.

Commercial payors are going to pay on the rate your facility is able to negotiate. I do not understand why you would inflate your AR to charge a much higher rate and then have to either do a large contractual adjustment or write the excess off to bad debt.

I would be interested to see what formula each facility is using to set their fee schedule.

Connor Threlkeld
Connor Threlkeld 05/08/13 - 09:17 pm
Thanks for pointing that out

Thanks for pointing that out IBeDogGone, the address changed:

Little Lamb
Little Lamb 05/09/13 - 07:44 am

From the story:

“Charge is not relevant,” for the consumer, Belkoski said. What would be more useful would be finding out the negotiated payment an insurance company might have set with different institutions, he said.

What about the poor sap with no insurance who desires to pay his bills personally? Yeah, they offer a paltry "discount" and call it even. I saw first hand last year the outrageous charges for simple things at Doctors Hospital and I vow never to go there again if I am in a conscious state.

Doctors Hospital is all for the doctors and none for the patients.

harley_52 05/09/13 - 09:12 am
"It’s not like going to Home Depot and buying a wheelbarrow,” ..

...he said.

But it should be.

That's the problem.

JRC2024 05/09/13 - 09:19 am
I had some xrays of my neck

I had some xrays of my neck done at doctors and the fee was excessive. I asked before I had the work done if insurance was going to take care of this and the check in person said yes. After the work was done the insurance did not pay. Good doctors but terrible rates.

IBeDogGone 05/09/13 - 09:54 am
It is in the patients best

It is in the patients best interest to contact your insurance directly, the physcian or facility will give you CPT codes planned to use and your insurance can tell you exactly what is allowed after you have met your yearly deductible. It is important to make sure the facility you are using is in network with your insurance. If your Insurance Company is in network their is a contracted rate between the two parties and other than deductible you should not have a large balance. Of course this all depends on what procedures are allowed on your policy.

Riverman1 05/09/13 - 03:55 pm
The truth:

The truth: All areas hospitals can hire their own physicians and still turn an amazing profit. But what happens in most hospitals is the physicians make the money and leave the hospitals with the costs. The hospitals beg for donations while the physicians are pocketing millions.

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