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News of the Day ... in Perspective

12/31/2003

Is Medicare responsible for hospitals’ gouging the poor and the uninsured?

The American Hospital Association has admitted that hospital pricing is unfair to the needy and the uninsured. The industry has promised to make broad changes–but only if Medicare approves, according to the Wall Street Journal, Dec 17, 2003.

Medicare rules require hospitals to keep a single list of prices for all services. These are steeply discounted to insurers, but for them to be a credible basis for Medicare “outlier” payments, somebody has to pay them. Hospitals claim that Medicare rules require them to make aggressive efforts to collect from all patients.

In a letter to HHS Secretary Tommy Thompson, the AHA is requesting a “safe harbor” for hospitals who give discounts to uninsured patients.

In letters to the editor on Dec. 29, a former hospital CFO accused hospitals of blame shifting: “There is no language prohibiting the hospital from accepting less than charges.” Another writer stated that “prices are false and exaggerated in order to make the government and large insurers feel they are getting a deep discount.”

“Only because this disgusting overpricing system has been seen to cheat the poor has this issue drawn attention. But you must not forget that many people who do not have insurance do have the funds to pay for medical services and would if they could at a fair price,” concluded Kurt von Besserkurt.

Additional information:

Hospital billing under scrutiny, AAPS News, Nov 2003, p. 2

Why won’t hospitals post reasonable prices? AAPS News, July 2003, p. 2

British hospital posts fixed prices. www.nuffieldhospitals.org.uk

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