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Price Variations in New York Hospitals May Cost You Thousands

Last year, the federal government ordered all hospitals across the country, New York included, to start publishing the comprehensive prices that they negotiate with private insurers. The insurers felt the rule was unconstitutional, as it undermined competitive negotiations. They then sued the government to block the rule but lost.

So far, most hospitals have ignored the requirement and have not posted anything, as they want the information to remain hidden. This reveals that hospitals are aware they charge patients varying amounts for the same essential services. However, it’s important to be aware of these price variations, as hospitals can continue to price gouge their patients. If you or a loved one think you may have been unfairly charged, contact Dalli & Marino, LLP today. We can help you navigate your claim and answer any questions you may have about the legal process. 

Why Do Charges in New York Hospitals Vary?

Prices for services in hospitals can greatly vary, even within the same hospital. This surprising fact was proven after 60 hospitals that comply with the Center for Medicare and Medicaid Services (CMS) transparency rule were surveyed. The CMS requires hospitals to publish all of their rates online, and a few factors apply when hospitals haggle rates with payers across multiple industries.

While published rates don’t necessarily reflect what a patient pays, negotiated rates include the insurer’s payment to the provider and the patient’s payment as well. Some compliant New York hospitals are working toward being user-friendly, but the reason that most hospital charges vary is due to both hospitals and insurance companies attempting to get as much money as they can from patients. If you think you may have been unfairly charged by either the hospital or insurance company, reach out to an attorney today. They can help you navigate your case and get back the compensation you may be owed.  

Factors That Determine How Hospitals Set Their Prices

Outrageous health insurance premiums and hospital costs are taking a financial toll on New Yorkers. Statistics from the Consumer Price Index by the U.S. Bureau of Labor Statistics show health insurance prices have increased by 14% since last year alone. This has contributed to historic economic-wide inflation that has significantly affected employee wages as well. New York Councilwoman Julie Menin announced plans to reverse the runaway healthcare costs by introducing a bill that promotes price transparency in New York City hospitals, thus empowering patients to lower costs through competition and choice.

But still, how can different insurers have varying medical costs in the same hospital? And what criteria do hospitals employ to set their prices? The biggest factor that determines how hospitals set their prices lies in a hospital-specific compendium called the chargemaster. The Charge Description Master (CDM) is a codex of pricing for all the items a hospital can bill a payer. Items captured in a CDM include the costs of treatment procedures, prescription drugs, diagnostics, equipment use, and room charges. 

Furthermore, professional coders, or health information management staff, assign specific reporting and claims submission codes. In turn, the codes are interpreted via a charge capture which is then used to bill you and create a claim for your insurer. This process is distinct for every hospital and depends on many factors, including:

  • The price negotiations a hospital has with a given insurance company
  • The cost of hiring administrative help and using costly software systems for billing and reimbursements from multiple payers
  • The cost of drugs and pharmaceuticals, which relies on outside market forces
  • Each hospital’s separate funding rules, employer-based insurance for out-of-pocket costs, private insurance, etc.
  • The fact that medical professionals in New York City hospitals are often paid considerably more than the average industrialized towns 
  • The will of the decision-makers, as they can impose whatever prices the market bears. The cost of the same healthcare service can greatly vary based on the payer and geographical area.

As you can see, price variations in hospitals are often an administrative decision that largely depends on current marketplace trends. One facility can increase its charges for a procedure by 30%, while another keeps the cost low for the same procedure, or a different New York hospital may assign one overall price for a specific surgery, while others issue line item charges for various parts of the service. It all depends on the will of the market, but it may end up costing you thousands if you’re not aware of what you’re getting billed for.

Contact New York Lawyers Dalli & Marino, LLP Today

Many healthcare facilities are still debating whether to modify the stated healthcare price changes or leave them. Healthcare economists agree that very little will change, which is because overhauling the CDM system calls for substantial time and money investment. However, if you think you may have been unfairly charged, partnering with a knowledgeable attorney can help you get the compensation you may be owed. 

Talk to us at Dalli & Marino, LLP today. We’re eager to work with you on your claim and fight to get you any money you may be owed by unfair price variations. Call our offices at (888) 465-8790 or fill out our online contact form for answers to questions you may have regarding this topic.


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