CMS Hospital Price Transparency FAQ's

Price transparency can be confusing at times, especially when it comes to healthcare. A major difficulty is that the hospital’s price is not the actual cost or the out-of-pocket costs for healthcare services that patients will receive. It depends on their insurance coverage. What's more, it's often difficult for providers to offer a simple, standard price for any given healthcare service.

As an example, physicians, nurses, and clinical teams sometimes need to complete a variety of tests and exams to diagnose and determine what care plan or treatment plan a patient needs. When considering all the factors that play into this determination and what is best for the patient, it can become more and more challenging to provide an accurate estimate for what the total cost to the patient will ultimately be.

Some price estimation tools do exist, however. But, in general, the treatment plan can introduce various levels of complexity that include: the patient’s insurance plan, specific benefits chosen by the patient; any specifics or details related to the contract and agreement between the hospital and the insurance plan; length of time spent in the hospital or facility; additional diagnostic tests, lab work, or procedures needed; or any other unforeseen conditions or circumstances that arise during your care or recovery. All of these factors can impact the out-of-pocket costs to each patient.

Hospital Price Transparency FAQ's

The Frequently Asked Question (FAQ) list below was created to help provide answers and assist our patients with trying to answer their most pressing questions related to price transparency, definitions, and terminology used.

Q: What is “price transparency” and why is it important?

A: Price transparency is the ability for the healthcare consumer to access provider-specific information on the price of healthcare services. It is very important to note that the price transparency information included here is a listing of the hospital’s gross charges as mandated by the Centers for Medicaid and Medicare Services (CMS), effective Jan. 1, 2019.

Q: Why do consumers & patients need price transparency?

A: Consumers need price transparency for a few reasons, but here are a couple main reasons: to help inform consumers and patients of their financial responsibility when it comes to healthcare decisions and to reduce unknown price variation in the system.

Q: What are the different types of healthcare costs to patients?

A: It is important to note that the pricing listed for Silver Cross does not calculate out-of-pocket costs for patients; rather, it is simply a listing of our gross charges. There are 3 different types of cost depending on who is paying for the service:

Patient’s Out-of-Pocket Costs

The patient’s out-of-pocket costs often include the total amount of premium payments made to the insurance plan, the plan’s deductible(s) amount(s), copayments depending on the type of service (i.e., ER copay, Office or clinic copay, immediate care copay, etc.) and a co-insurance paid to healthcare providers and health insurance companies for a patient’s healthcare coverage. The cost to patients also includes healthcare supplies and services received within the coverage period. Healthcare services not covered by insurance can be another type of cost, commonly referred to as out-of-pocket costs, which are NOT shown in the listing of prices displayed.

Provider/Hospital Costs

Providers/hospitals are paid by insurers for the services they deliver to patients, but they also incur a considerable amount of operating costs that are often lost in the equation. These costs can include the amount paid for land, buildings, equipment, supplies, wages & benefits, laundry & housekeeping, electronic medical records, as well as the healthcare services themselves used when delivering care to patients. Providers also absorb the cost of delivering care to patients who are unable to pay for their own care, which is often a considerable amount of patients in each community and service area.

Payer Costs

Insurance payers in the healthcare system include both private insurance companies and government insurance programs. The cost to healthcare payers is the total amount they distribute in patient claims. The second major cost to payers is operating costs such as wages & benefits, supplies, and administrative costs that are managed and controlled by each insurance plan company.

Q: Is there a difference between price, cost and payment?

A: Yes, there are major differences between these terms, and it is extremely important that everyone, especially patients and consumers, understand the differences between them.

Price

In healthcare, price or pricing transparency refers to the amount a provider sets for a specific healthcare service(s) or supplies. Price is often referred to as the (gross) charge for a healthcare service, and serves as the starting point from which payment is negotiated.

Cost

Cost refers to the amount spent by the provider/hospital in delivering healthcare services, and includes all of the expenses associated with operating their business in order to deliver healthcare services, from supplies, utilities, payroll or wages & benefits for all staff, both clinical and non-clinical, research in offering new healthcare services and technology, and all expenses that are incurred.

Payment

Payment(s) simply refers to the dollar amount which is paid from the insurance companies, whether public or private, to providers/hospitals for healthcare services. Often, this rate represents a contracted rate or negotiated rate between two entities (usually the hospital and the insurance companies/plans), which is a major reason why variation exists between pricing, costs, and actual payment for healthcare services.

It is important to note, that payments from insurance companies and plans are continually decreasing, which shifts cost and requires more payment from the patient and less from the insurance plan/company. Patient payment also includes the amount received directly from patients for their deductible, co-insurance, or co-pays, as well as charges for services not covered by the insurance policy.

Q: How is a price set?

A: The price of healthcare services is achieved by calculating the total operating expenses of a provider/hospital and the cost of delivering a specific treatment to the patient.

Q: Who sets the price?

A: Hospitals use a charge-master, commonly referred to as a CDM, which is a comprehensive list of all items that can be billed to either a patient or an insurance provider. Charge-masters are extensive, often containing tens of thousands of items, or healthcare services or supplies, depending on the facility, trauma level, location, certifications of the facility and hospital, etc. While the charges associated for each item are rarely paid due to the very heavy and severe discounts negotiated by private insurers, hospitals use them as a starting point for billing purposes in order to avoid a violation of the Social Security Act, which requires hospitals to give the federal government their best price/pricing.

Q: Why are there price differences between hospitals?

A: There can be variations, sometimes rather large variations, in the prices that hospitals set for the same procedure or service. This can be due to the many factors that go into determining the cost of hospital services and that each facility has its own set of factors to manage which determines its cost structure, i.e. cost of running the facility, location/market, size of the facility, services offered at each facility, etc. A few other items that can impact pricing and costs are the complexity of the service(s) being provided, such as trauma, transplant, or neonatal intensive care, that are extremely expensive to maintain. Other items that can impact pricing and costs are whether the organization has mission-related costs, such as teaching, research, or providing care for low-income populations.

Q: Where can I find information on pricing?

A: While private insurance companies do not typically release comprehensive price information because it would undermine their ability to compete for business, there are several ways for patients/healthcare consumers to educate themselves prior to receiving a healthcare service or procedure.

Silver Cross Price Transparency Listing [Text File]

The Centers for Medicare & Medicaid Services Medicare releases annual payment information for inpatient and outpatient procedures. For more information, visit them online.

Q: Is the price I pay for services all I should consider in selecting a provider?

A: No, pricing is only one main aspect of choosing a healthcare facility or provider. The quality of healthcare is extremely important to consider when choosing a provider or hospital, such as Silver Cross. One major way that quality is measured is based off of the Centers for Medicaid and Medicare Services ranking and grading system, which consists of a 5-star system. Silver Cross is a 5 star hospital, which is the highest ranking that a hospital can achieve and is only maintained by 9% of hospitals and healthcare systems throughout the country. Another important factor is the convenience and access to a healthcare provider.

Insurance Coverage

Q: Does the type of insurance coverage I have impact my out-of-pocket costs?

A: Yes, very much so. It is very common for health insurance entities, both public and private, to charge various amounts for deductibles, co-pays, and co-insurance depending on your insurance plan. All of these variables can have a direct impact on the amount of money you spend on healthcare services. In addition, high-deductible plans, which typically require a large upfront payment from the patient before the insurance company begins paying, are becoming more common as employers are finding it increasingly difficult to cover the entire cost of healthcare for their employees.

Q: Why do some people on Medicare pay a different amount for the same procedure than others?

A: Some providers have different, and sometimes higher, operating costs than others. A hospital that serves a disproportionate share of uninsured patients and is also a certified teaching hospital will have much higher operating costs than a standard acute care hospital. These higher operating costs are ultimately reflected in the price of care for Medicare-covered procedures. In addition, the cost variation among Medicare enrollees is based on the type of Medicare health insurance held by each enrollee. Medicare Advantage Plans, offered by private companies such as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), often have different prices when compared to traditional Medicare plans since they are negotiated by private companies.

Q: What types of payments can insured patients be expected to make?

A: There are a few different financial responsibilities patients must face and understand:

Deductible

The amount you owe and must pay to your hospital or healthcare provider for healthcare services rendered or provided to you as a patient, before your health insurance plan begins to pay. For example, if your deductible is $1,500, your health insurance plan will NOT pay anything until you (as the patient) have met your $1,500 deductible first and paid that in full for healthcare services. Your deductible may not apply to all services received; for example, some plans offer preventive services, annual mammogram or physical exam, free of charge.

Co-Pay

The fixed amount of out-of-pocket costs you pay when visiting the doctor’s office for a particular healthcare service. For example, if your co-pay is $50 for an Emergency Room visit, you will pay $50 each time you visit the Emergency Room, regardless of the diagnosis or reason for visiting the Emergency Room, and your insurance company pays the rest of the cost for your visit.

Co-Insurance

The co-insurance amount of covered benefits is what the patient is responsible for paying after reaching their deductible amount. For example, if your co-insurance is 20% of your medical costs, and your total bill is $100, you will pay $20 of that total bill, and your insurance company is responsible for the remaining portion of that bill, or $80.

Q: What is the difference between a covered and non-covered service?

A: The difference between a covered and non-covered service is essentially just that – some services are paid for by your insurance, while others are not. Every health insurance plan has services they cover and services they don’t cover. Non-covered services are based on insurance type, and services not covered by your health insurance plan are services that the healthcare consumer is responsible for paying.

Uninsured Patients

Q: If I am uninsured, do I pay the hospital’s full price?

A: To be clear, no one, absolutely no patient, pays full price for any of Silver Cross’s services. If you are uninsured you will not pay the hospital’s price, rather we offer a Self-Pay or Uninsured Discount to all patients without healthcare insurance. Each hospital’s discount program is different; please check with the Patient Financial Services team to find out more information about the discounts available to you.

Q: What options do I have if I am uninsured?

A: The Affordable Care Act (ACA) ensures everyone has access to some type of health insurance coverage. If you don’t have health insurance coverage, but need to schedule a hospital visit, contact the Patient Financial Services department to discuss the out-of-pocket costs you can expect. There are a variety of options available to you.

ACA Marketplace

The Affordable Care Act’s online marketplace, www.healthcare.gov, is a place where you can shop for health insurance to find the one that best suits your needs.

For more information about pricing call (815) 300 2811 or email businessoffice@silvercross.org