Today’s Consumer Price Index release shows a big jump in prices for hospital services. The Wall Street Journal has an exemplary piece of investigative journalism discussing one way hospitals gouge Medicare:
A Wall Street Journal analysis of Medicare claims data and financial filings from medical facilities shows that many hospitals increased prices faster than costs rose, affecting outlier payments. The Journal identified $2.6 billion in overpayments Medicare made to general hospitals between 2010 and 2013 because of overestimates of hospitals’ costs—about one-sixth of outlier payments in the analysis.
At Christ Hospital, more than 40% of outlier payments between July 2012, when the hospital was acquired by an investor group during bankruptcy proceedings, and the end of 2013 were due solely to an increase in prices, the Journal analysis shows.
The Medicare agency took steps in 2003 to deter hospitals from raising prices to increase outlier payments, sometimes referred to as “turbocharging.”
(Christopher Weaver, Anna Wilde Mathews, & Tom McGinty, “Medicare Pays as Hospital Prices Rise,” Wall Street Journal, April 15, 2015)
Well, that’s 12 years ago, and it obviously hasn’t worked. The only way to get hospitals to quite manipulating chargemaster prices is to get the government out of fixing hospital charges.