Billing rates at 7 area hospitals questioned

A new report reveals some hospitals are marking up their prices more than 1,000%. And some of the top offenders are in our area.

Researchers at Johns Hopkins School of Public Health analyzed 2012 Medicare billing records to determine how much hospitals mark up charges beyond what Medicare agrees to pay.

On average, typical hospitals charge 3.4 times the Medicare-allowable cost, meaning that for $100 in costs, the hospital charges $340.

But they found 50 hospitals which charged an average of 10 times the Medicare rate.

7 of them are in the eastern/southeastern Pennsylvania area.

They are: Chestnut Hill Hospital, Hahnemann University Hospital, Crozer Chester Medical Center, Brandywine Hospital, Phoenixville Hospital, Pottstown Memorial Medical Center, and Easton Hospital

The Hopkins study notes that 49 of the 50 hospitals with the highest markups, 49 are for-profit facilities.

Of the local hospitals, Crozer Chester is the only not-for-profit.

Hahnemann University Hospital is owned by Tenet Health, while the others are owned by Community Health Systems, Inc.

Not too long ago, there were no for-profit hospitals in the Philadelphia area, but now, they are a bigger and bigger presence.

On a practical level, most patients don't pay full price, because government and private insurance companies negotiate lower prices.

But the study says anyone uninsured or out-of-network can be charged the full amount.

It also notes anyone whose bills are being paid through workers' compensation or auto insurance benefits will also likely face the full price.

Some states, like Maryland, regulate hospital rates, so that everyone is charged the same for a procedure, regardless of their insurance or lack of it.

But Pennsylvania does not have price controls.

New Jersey does have state laws mandating discounts for certain uninsured patients.

Experts say there needs to be federal regulations.

The study comes amid a national push to increase transparency in hopes of curbing rising health costs.

The Obama administration began publishing some data, including hospital spending and the costs of popular procedures, like joint replacements, three years ago in an effort to encourage consumers to compare prices.

The Delaware Valley Healthcare Council, representing the local hospitals, issued the following statement on the study:

"Unfortunately, these findings on hospital "charge-to-cost" ratios do little to clarify or advance the very important conversation about health care spending under way in the region, state, and nation.

The study focuses on charges, which, as the findings note, are often higher than what the vast majority of patients pay for their health care-and therefore largely irrelevant.

About 90 percent of people in the five-county region have health insurance through employers, Medicare, Medicaid, or Obamacare. For care provided to these patients, hospitals are paid according to fixed or negotiated rates that are typically a fraction of charge rates.

Uninsured patients also are rarely, if ever, asked to pay charge rates, especially if these patients are of limited financial means. Hospital charity care policies ensure that such patients get their care for free or at a discount. Hospitals in the region provided $145 million in charity care in 2013.

Charges are an unfortunate but difficult-to-eliminate vestige of decades-old health care financial systems and practices, including government requirements.

Hospitals agree that providers, patients, and insurers need to get better at talking clearly and frankly about patients' financial obligations for their health care. Pennsylvania hospitals are working collaboratively to adopt principles and guidelines that will foster improved communications."

A spokesperson for Community Health Systems said, "All hospitals affiliated with Community Health Systems offer significant discounts for uninsured patients and charity care for those who qualify. Last year, our organization provided over $3.3 billion in charity care, discounts and other uncompensated care for those who can't afford healthcare services."

It also noted that in 2012, when the data was collected, a third of the CHS hospitals on the list were owned by another for-profit company.

Hospitals are also locked in a battle with the Administration because of looming cuts in federal reimbursements.