Hospital chargemasters, internal price lists, are used as a basis to extract far higher payments from uninsured patients than those who have coverage, although hospitals dismiss their significance altogether, reported Time magazine.
The article examined the medical bills of seven people who lacked insurance or were underinsured, and found large markups in all instances. In one case, the bills to treat a case of heartburn ran $21,000.
"Although every hospital has a chargemaster, officials treat it as if it were an eccentric uncle living in the attic," wrote Court TV and American Lawyer magazine founder Steven Brill. "Whenever I asked, they deflected all conversation away from it. They even argued that it is irrelevant."
For example, the Central California Alliance for Health, which provides community-based care for 210,000 low-income residents, does not consider a hospital chargemaster as realistic, reported the Santa Cruz Sentinel.
"The alliance doesn't pay the hospital based on the chargemaster rate," said spokersperson Alan McKay.
Similarly, Stamford Hospital in Connecticut noted chargemaster prices are "not real" rates. "It's a list we use internally in certain cases, but most people never pay those prices," Stamford spokesperson told Time. "I doubt that (CEO Brian Grissler) has even seen the list in years."
But with increased hospital-physician consolidation, insurers are negotiating discounts off the excessive chargemaster prices rather than up from the Medicare rates, according to Time.