The Indiana Supreme Court has heard oral arguments in a case that could have repercussions regarding one of the most closely guarded secrets of many hospitals: What they charge insured patients versus their chargemaster rates.
The case involves motorcycle accident victim Thomas Frost, who is uninsured, the Fort Wayne Journal-Gazette has reported. He was treated at Parkview Hospital in Indianapolis and a rehabilitation center after he was seriously injured in 2013. Frost, who was uninsured, received a bill totaling more than $625,000. He challenged the reasonableness of the charges in court, with a state appellate court ruling that Parkview should reveal what it charges its insured patients for care.
A billing expert retained by Frost's attorney has concluded that the reasonable value of the services provided was actually $246,640, or less than 40 percent of what Frost was actually billed, according to the article. An attorney for the Indiana Trial Lawyers Association also argued on Frost's behalf, claiming that such disclosures would help control rising hospital costs.
Uninsured patients are often charged at the rate of a hospital's chargemaster price, although it is sometimes multiples higher than the price paid by patients covered by Medicare or commercial insurers. Many hospitals have said chargemaster prices hold little relevance, but often balk at releasing their insured rates for competitive reasons. The murkiness surrounding prices and charges have been a major obstacle for patients to receive price transparency from their providers, enabling them to shop around for services.
Parkview's attorney has argued that insured patients are entitled to discounts because they pay premiums and their carriers usually bring large numbers of patients to the hospital or its affiliated providers for care, according to the publication.
"We don't think a person who is not a member of the club should get the benefits of the club," Parkview attorney Ted Storer said, according to the Journal-Gazette.
It is possible the state Supreme Court may not rule at all in the case, meaning Parkview would be compelled to turn over its charge records to Frost, the Journal-Gazette reported. Earlier this year, a U.S. Supreme Court case ruled in favor of the insurance industry over squabble regarding Vermont's attempt to create an all-claims payer database.