Three North Texas hospitals are among the nation’s top 50 for charging beyond rates approved by Medicare for procedures, according to a study published this week in Health Affairs.
Researcher Gerard Anderson of the Johns Hopkins Bloomberg School of Public Health teamed with Washington and Lee University’s Ge Bai for the white paper. The two used figures from the Centers for Medicare and Medicaid Services for 2012 (the latest year available) and determined the highest charge-to-cost ratios for more than 4,000 hospitals throughout the United States. Defined as the ratio of actual charges to Medicare-allowable costs, the researchers then listed 50 hospitals that charged the most for procedures. Those on the list averaged 10 times more than the Medicare allowable cost, whereas the rest averaged 3.4 times.
The findings mean these hospitals were on average charging $1,000 for every $100 of cost.
Among those in the Dallas-Fort Worth area: No. 11, Texas General Hospital in Grand Prairie, which charged 10.8 times more; No. 43, Dallas Regional Medical Center in Mesquite, which charged 9.4 times more; and No. 50, Lake Granbury Medical Center in Granbury, which charged 9.2 times more. The Washington Post has a nifty interactive map illustrating the whole list.
Texas General did not respond to an email and phone messages requesting comment, but has received attention for its charging practices in the past.
Dallas Regional Medical Center recently changed hands. Ontario, California-based Prime Healthcare closed on the deal in March, buying the 202-bed facility from Community Health Systems.
In fact, Community is well represented: 25 of the 50 are owned by the Tennessee-based health system. The Hospital Corporation of America owns 14 on the list. Forty-nine are for-profit hospitals and 46 are owned by for-profit systems. Twenty are in Florida, and five are in Texas.
In an interview, Dallas Regional Medical Center CEO Raji Kumar said the hospital is still operating on the infrastructure established by Community.
“We just acquired this 90 days ago from Community Health Systems,” she said. “We are still part of a transition and we haven’t taken full control. Once we take control, we will change our charge master, but the charge master we have today is the one that CHS set up.”
The researchers define the “charge master” as the full price for the procedure, which, they note, many hospital patients rarely pay. Insured patients have a payer to negotiate costs. Government plans pay what they pay and that’s that. Bai and Anderson express concern for the 30 million uninsured Americans who don’t have the same negotiating power with the hospitals. If poor and uninsured patients are charged full price or beyond, it can force them into bankruptcy or torpedo their credit scores.
Even insured patients are not immune from risk. The researchers say hospitals start with higher prices to improve their bargaining strategy, boosting their chances of getting more money out of private plans. Says Bai in a statement: “Except for patients with government insurance, few consumers are immune from negative financial impacts caused by hospitals’ high markups.”
Community Health System issued a public statement saying the study didn’t highlight the full story, noting that it doled out $3.3 billion in charity care, discounts, and other uncompensated care for patients who needed it and reiterated that the charge is rarely what the patient pays.
In an emailed statement, Lake Granbury Medical Center spokeswoman Dixie Lee Hedgecock echoed Community’s and discussed its charity care guidelines. Any patient whose household income is at or below 300 percent of the current federal poverty rate ($72,750 for a family of four) qualifies for assistance. Last year, the hospital provided $3.2 million in charity and uncompensated care. The hospital’s full statement is below.
Hospital reimbursement is a complex issue involving multiple players in a system that has evolved over many years. Charges vary from hospital to hospital because each has a unique mix of payers, patients and services.
Hospital charges do not accurately portray what consumers pay for their healthcare. At our hospital, we provide substantial discounts for those who are uninsured and we offer charity care for those who qualify. Medicare and Medicaid determine what they will pay for our services, which is often less than the actual cost of care. And, insurance companies negotiate the rates that they will pay.
Healthcare costs are complicated, and we know what really matters to patients is what they personally pay out of pocket. We have financial counselors who work with our patients to help them understand their financial responsibility, including co-pays, deductibles, and, in the case of the uninsured if they are eligible for discounts, financial assistance, Medicare, Medicaid or charity care.
Lake Granbury Medical Center (LGMC) extends discounts to uninsured and self-pay patients. LGMC’s Charity Care Guidelines are for patients whose household income is at or below 300 percent of the current Federal Poverty Income Guidelines.
LGMC provides medically necessary emergency care for patients every day, regardless of their ability to pay. In 2014, the hospital provided $3.2 million in charity and uncompensated care to the area’s most in-need residents and paid $1.2 million in taxes to support our community’s civic resources as well as state and federal programs.
We manage fiscal operations of Lake Granbury Medical Center to remain a vital contributor to the quality of life and economic health of the community. Our positive operating margins allow us to reinvest in the services we provide, including a total of $48.9 million of routine capital and investments since 2006. Significant advancements in medical care include:
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3rd Floor addition, Surgery Expansion, Facility Renovations, New 12-bed ICU
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Fall Creek Medical Plaza, Open MRI, Electronic Medical Records
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Nationally Accredited Chest Pain Center & National Accredited Sleep Disorders Center
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Solis Mammography – a department of LGMC
