The prices hospitals set for a list of common procedures increased by more than 10 percent between 2011 and 2013 — more than the rate of inflation — but the proportion of these prices paid by Medicare has hardly budged, according to data released Monday by CMS.
Hospitals' rising list prices primarily affect the uninsured and people with coverage but who seek care at hospitals outside of their insurance network, according to the New York Times.
Because insurers negotiate lower rates with hospitals, most people with health insurance, including those covered by Medicare plans, will never receive a hospital bill with the hospital's list price. However, increased list prices are of growing concern for those who are uninsured or seek treatment at hospitals outside of their insurance network, according to the report. Over the last few years, insurers have been outlining narrower networks of physicians and hospitals, making it easy for patients to accidentally choose the wrong hospital and get stuck with massive bills.
"As networks narrow, charges for out-of-network providers become more important," Caroline F. Pearson, senior vice president at Avalere Health, told the New York Times.
Increasing list prices is a simple way for hospitals to increase revenues, Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins Bloomberg School of Public Health in Baltimore, Md., told the New York Times. Even if hospitals are never paid the full amount they charge customers, raising the list price "gets them some cents on the dollar," he said.
According to the American Hospital Association, growing list prices merely reflect the increasing costs of running a hospital, noting that Medicare, which sets its own prices, pays less than the cost of providing care to patients in many hospitals.