Medicare Required Standard Charges Must Be Posted on Your Website
Medicare has defined several different types of standard charges that should be available for patients to see. They are:
Cost Ranges
The cost of healthcare services can vary significantly based on the type of charge applied. Gross charges are typically higher as they represent the starting list price. Discounted cash prices may offer significant savings for those paying directly. Payer-specific charges vary based on the negotiated agreements between the hospital and the insurer.
Local Tips
- Always request an itemized bill to understand what services you are being charged for and at what rate.
- Check with your insurance provider to see what negotiated rates apply to you, as this can significantly affect your out-of-pocket expenses.
- If you're uninsured, inquire about available financial assistance programs or cash discount options at hospitals.
FAQs
What are gross charges?
Gross charges are the full list prices for healthcare services as outlined in a hospital's chargemaster. These do not include any discounts or negotiated rates with insurers.
How can I find out my expected costs?
Contact your healthcare provider or hospital for a pre-service estimate. Additionally, your insurance provider can provide details on your coverage and any negotiated rates applicable to your plan.
What should I do if I can't afford the gross charges?
Discuss payment plan options or financial assistance programs with the billing department. Hospitals often have policies in place to help manage costs for those unable to pay the full amount upfront.
- Gross charges
- Discounted cash price
- Payer-specific negotiated charge
- De-identified minimum negotiated charge
- De-identified maximum negotiated charge
Gross Charges
The gross charge is the full list price from the hospital chargemaster or CDM (charge description master). Each hospital sets a gross charge for every individual service rendered to patients within their chargemaster. These gross charges do not include any discounts that may be offered, and they serve as the starting point from which payment is negotiated with individual insurance payers for specific insurance plans. As a patient receives services throughout the hospital visit, a charge for each service provided is generated on the patient’s account resulting in a claim that is submitted to the patient’s insurer.
Patients will almost never pay the listed gross charge for healthcare services. However, under federal law, all insurers, including Medicare and Medicaid, must be billed the amount listed on the chargemaster for those services.
Gross charges can vary, sometimes greatly, from hospital to hospital for the same procedure or service based on how each hospital manages its charges and costs. Charges can vary based on geography, physician supply and medication preferences, the kinds of services the facility typically provides, and the expertise required to deliver these services. Depending on which (if any) group purchasing organization the hospital is a part of, drug and supply costs can also vary greatly.
Discounted Cash Price
The discounted cash price is the price offered to patients willing to pay in cash at the time of service without involving insurers. This is often referred to as the self-pay price.
Payer-Specific Negotiated Charge
The payer-specific negotiated charge is the charge that a hospital has negotiated with a third-party payer for an item or service. This negotiated charge amount will likely vary from payer to payer and even between insurance plans for the same insurance payer.
De-identified Minimum Negotiated Charge
The de-identified minimum negotiated charge is the lowest charge that a hospital has negotiated across all insurers for an item or service.
De-identified Maximum Negotiated Charge
The de-identified maximum negotiated charge is the highest charge that a hospital has negotiated with all insurers for an item or service.
