By Martine G. Brousse
"The Medical Bill Whisperer"
Patient Advocate, Certified Mediator
October 2, 2023
What is this “chargemaster” we hear often?
What is the one important thing to remember?
How can it be affected?
Let’s start at the beginning
A. What is it exactly?
The "chargemaster" is the detailed list of every single hospital's services, procedures, and supplies and the price that each is assigned and billed to patients or their health insurance.
By extension, it also represents the list and prices of services, procedures and supplies rendered and billed by a professional or facility (Dr, imaging center, infusion center, nursing home, pharmacy, etc)
The pricing is determined by the Hospital's Finance Dept (or individual medical providers) as the “fair market value” of each item, based on their own criteria.
Since Jan 1, 2021, hospitals are mandated to post their standard charges on their website. Implementation has been difficult and met with resistance, as chargemasters are routinely used for non-medical purposes, such as showing more losses (if the amounts adjusted are large due to overpricing) or less in order (to maintain a non-profit status for example).
Do chargemaster prices reflect the true cost of medical service/item? Of course not. You might be shocked that the aspirin billed to you or your insurance @ $ 5.00 a pill actually only costs 2 cents. Billed prices are rarely/never an actual representation of the true value of a service, causing frustration and outrage for patients and insurance companies.
However, chargemaster prices are still the basis of payment calculations because they reflect as “billed amounts” on claims and bills.
B. The most important
In my decades as a billing manager then patient advocate, I have come to almost disregard chargemasters. Why?
BECAUSE WHAT MATTERS MOST IS HOW MUCH THE HOSPITAL OR PROVIDER WILL EVENTUALLY ACCEPT AS “PAYMENT IN FULL”, NOT WHAT IS BILLED.
If I have a 100k hospital bill, but my insurance payment of 45K is accepted as payment in full, then does it really matter how much was adjusted off?
I’m sure the price was outrageous to start with, and it is frustrating as I had no idea ahead of time, but down the line, a lower beginning price would only have resulted in a smaller adjustment, but the same 45K payment.
Insurance contracts are NOT based on billed prices but on complex criteria and actuarial data.
C. How to lower this chargemaster?
1. Insurance contract or arrangement
This is the surest way to (significantly) reduce the Chargemaster’s billed amounts.
In Network facilities will adjust off as per their contract with your insurance.
Even if out of network, there are State laws, Federal mandates, and terms of policy which may apply and force hospitals (and related providers) to accept a (much) lower fee. This usually applies to emergency conditions, or others out of your control (no in network hospital within 30 miles from your home for example)
Hospitals also routinely accept one-time agreements with insurance companies.
2. Hospital routinely offer a number of discounts to patients:
· Self pay: those without insurance get a chunk taken off the top
· Prompt Pay: if you pay the balance at once instead of making monthly payments, you may get a small discount
· Financial assistance grants. In my blog dedicated to this topic, I explained how the ratio of medical debt to one’s income, and the size of the patient’s household affect a potential charity discount. While some hospitals are more generous than others, those doing business with Medicare must offer such a program.
· Direct negotiations: the last step in my book, it may be an option under certain circumstances. Of note: if you do not qualify for financial assistance, the odds of a settlement being even considered can be low.
· Hospital chargemasters must be available on the website. However, no one can mandate how clear, understandable and reliable they have to be.
· Don’t trust any chargemaster quote unless in writing, and even.. The final bill is calculated after services are rendered, many of which cannot be anticipated in advance. Do expect a difference between any quote (usually called an “estimate” for that reason) and the final balance unless clearly stated.
· If you have no insurance, always ask for an “itemized bill”. Errors are common, and getting them off your bill first will reduce it before any additional discounts are applied. A certified coder or specialized patient advocate can help audit it and point out questionable charges.
· Your best bet if you have insurance, is to use In Network providers whenever possible. A list is available through your insurance online account, or by calling the 800 number at the back of your card. This is the surest way to never have to worry about the name “Chargemaster” again.
Martine Brousse, the "medical bill whisperer" is a Patient Advocate and Certified Mediator located in CA and the founder of AdvimedPro, which she started after 20 years as a billing manager for physicians.
@ Martine G. Brousse 2023
@ The medical bill whisperer 2023