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:

• 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.