See Which CMass Hospitals Charge the Most to Medicare

Saturday, May 11, 2013

Ashley Klann, GoLocalWorcester Contributor

National Medicare figures were revealed this week from the US government, showing which hospitals are charging the most for procedures, and how much they actually make from Medicare paybacks.

The survey of 2011 figures from the federal government revealed that the cost for the same procedure can vary by tens of thousands of dollars, even within the same city, including Worcester.

When comparing the city’s two major hospitals, the cost to Medicare to put in a pacemaker at UMass Memorial Medical Center is $78,756. The hospital receives on average, $24,612 in payment. For the same procedure at St. Vincent Hospital, Medicare is charged only $49,450, and the hospital receives on average $20,071 for the procedure.

With the release of the national data, the government stated that the release was “part of the Obama administration’s work to make our health care system more affordable and accountable.”

“Currently, consumers don’t know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city,” said Secretary of Health and Human Services (HHS) Kathleen Sebelius in a release with the data. “This data and new data centers will help fill that gap.”

A Call for Transparency

Data released provides hospital-specific charges for the more than 3,000 U.S. hospitals that receive Medicare Inpatient Prospective Payment System (IPPS) payments. The survey only looked at the top 100 most frequently billed discharges, paid under Medicare based on a rate per discharge.

Hospitals determine what they will charge for items and services provided to patients and these charges are the amount the hospital bills for an item or service.

"Transformation of the health care delivery system cannot occur without greater price transparency. While more work lies ahead, the release of these hospital price data will allow us to shine a light on the often vast variations in hospital charges,” said Risa Lavizzo-Mourey, president of the Robert Wood Johnson Foundation, the largest philantrophy devoted to public health in the nation.

In releasing the data, the HHS made approximately $87 million available to states to create health care pricing data centers to assist consumers.

Worcester’s Most Costly

Of the thousands of hospitals tracked for the national survey, two were recorded in Worcester – UMass Memorial Medical Center and St. Vincent Hospital.

The top 12 most expensive procedures in terms of the average charges made to Medicare, were from UMass Memorial. The most expensive cost was listed as 870 – Septicemia or severe sepsis lasting over 96 hours, which cost on average, $148,628 to Medicare, per procedure. In 2011, the hospital reported 60 discharges of this kind. For this service, UMass Memorial was paid on average $57,963 from the US government.

Other costly procedures from UMass Memorial consisted of those related to infectious and parasitic diseases ($131,943), respiratory system diagnosis with ventilator support lasting over 96 hours ($125,800), and major small and large bowel procedures ($98,058).

Major joint replacement or reattachment of lower extremity was also listed as a major expense ($85,631.21), as well as G.I. hemorrhages ($65,680), and major cardiovascular procedures ($67,987).

The most expensive procedure provided by St. Vincent Hospital in 2011 was a spinal fusion, costing $66,465 with a Medicare payback of $30,948 on average. This same procedure at UMass Memorial cost $83,384 to Medicare, with an average payback of $36,779.

Central Mass

When compared to other Central Mass. hospitals that serve the region, UMass Memorial again topped the list with the top eight most expensive procedures.

Metrowest Medical Center in Framingham came in at number nine with major percutaneous cardiovascular procedures, costing Medicare $69,249 with a payback of $22,500. This same procedure at UMass Memorial cost $86,145, with $32,817 in payback, and St. Vincent Hospital - $63,545,with $24,901 in compensation.

Leominster’s Health Alliance Hospitals, Inc. came near the top for large and small bowel procedures – $57,310, with a payback of $34,390.

Ayer’s Nashoba Valley Medical Center’s most expensive procedure was major joint replacements or reattachment of lower extremities, running a bill of $45,664 and an average payback amount of $13,099. Marlborough Hospital charges $37,117 for the same procedure, with $13,415 in average reimbursement from Medicare. Merrimack Valley Hospital comes in close, charging $36,801.

Ware’s Baystate Mary Lane Hospital, Harrington Memorial Hospital in Southbridge, and Heywood Hospital in Gardner were also tracked in the 2011 data results.

Compared to the Rest of the State

The most costly hospitals in the state were primarily those serving Boston, including Brigham and Women’s Hospital, Massachusetts General Hospital, and Tufts Medical Center.

Worcester’s UMass Memorial Medical Center came in with the tenth most costly procedure in the state. The same procedure – septicemia or severe sepsis – also took three of the top ten positions at other hospitals. The procedure at the most expensive hospital, Brigham and Women’s Hospital, runs a bill of $258,179. The average payback for the procedure is only $70,887, which was also the highest average repayment amount in the state.

A Drain on Medicare?

Some state groups like the Beacon Hill Institute say that Massachusetts’ Medicare spending is out of control. In a recent report the advocacy group published, they suggest that giving clearer options between drug plans and promoting generic prescriptions are effective ways to control costs of Medicare.

The data released from the federal level will likely take time to sort, but the initial reasoning of transparency and open options is a step in this direction.