Updated March 23 at 12:28am

CMS: Hospital prices vary greatly

New data released by the U.S. Centers for Medicare and Medicaid Services shows the prices charged to CMS by hospitals around the state – and across the country – can vary greatly.

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CMS: Hospital prices vary greatly


WASHINGTON – New data released by the U.S. Centers for Medicare and Medicaid Services shows the prices charged to CMS by hospitals around in the state – and across the country – can vary greatly.

For example, for an outpatient biopsy performed by Newport Hospital the charge to Medicare was $496.83, and the Medicare reimbursement for the procedure was $232.01.

Contrast that with Landmark Medical Center in Woonsocket, which produced the highest charge from a Rhode Island hospital, according to the CMS data. That came in at $2,598.61 with a corresponding reimbursement of $338.70. Richard Charest, president and CEO of Landmark, did not immediately respond to requests for comment.

Kent Hospital charged Medicare the second-most: $1,715.12 (and received $259.78 per procedure).

The same procedure at Roger Williams Medical Center in Providence produced a charge of $1,298.01 with a reimbursement by Medicare of $338.75.

In terms of the most charged elsewhere in the U.S. for the “Level I Excision/Biopsy,” though, Landmark’s fee was modest.

The most-expensive charge to Medicare for the procedure anywhere in the country was AMHC Anaheim Regional Medical Center in Anaheim, Calif., which charged Medicare $31,435.00 (and received $346.24).

This year marks the second release of the charges to the public.

The creation and release of the data was mandated by the Affordable Care Act, which requires CMS to publish hospital charges annually.

According to Michael Souza, acting president of the Hospital Association of Rhode Island, the CMS numbers are easy to misinterpret, mostly because charges have been decoupled from costs.

“Charges really meant something probably more than 20 years ago when the reimbursement system was a cost-based system,” Souza said. “You billed your charges, and you billed it off your cost structure, you might have had your charges being three times your cost, two and a half times your cost, whatever you needed, so that way you maximized your reimbursement.”

According to Souza, who formerly served as chief financial officer at Brockton Hospital, most prices for procedures are now set by insurance companies or Medicare.

“Medicare sets the rate for that decision, and it may be increased slightly for the area that you’re in or whether you have an education facility there,” Souza said. “Charges are really meaningless at this point, because everything is based on a fee schedule for reimbursement.”

As for the $31,435.00 charge for a biopsy and other similarly jaw-dropping charges on the CMS list, Souza said that nothing in his training or experience could help him understand it.

“That just seems outrageous,” he said.

Both Souza and association spokeswoman Amanda Barney said that the implication in some media reports about the numbers that people are hospital shopping, isn’t borne out in Rhode Island and nearby Massachusetts.

“What we always counsel people to do is consult the various publications showing the quality of care at specific hospitals,” Barney said, “and, at the end of the day, to talk to their physicians about the decision.”

Souza said that decisions on where to have procedures done in the region typically are coming from physicians or the experience of family members.

“What we usually see is that where a patient has a service is either driven by the physician, where they would do the service, or its based on family,” Souza said. “Your mother or your brother or your sister had a service done at a hospital, and so you want to have it at the same hospital. It’s driven more by physicians and families and not as much by cost. I maybe got one call or two calls a month based on estimates for care, while I was at Brockton Hospital.”

The complete findings can be found here.


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