Study: Area Hospitals Overcharging Out-of-Network Patients

Chestnut Hill Hospital and Hahnemann University Hospital are among seven southeastern Pennsylvania hospitals accused of price-gouging out-of-network and uninsured patients in a new study from the Johns Hopkins Bloomberg School of Public Health.

The 50 hospitals in the United States with the highest markup of prices over their actual costs are charging out-of-network patients and the uninsured, as well as auto and workers’ compensation insurers, more than 10 times the costs allowed by Medicare, the research suggests. It’s a markup of more than 1,000 percent for the same medical services, according to the study.

The other area hospitals ranked nationally in the top 50 are Crozer Chester Medical Center, Brandywine Hospital, Phoenixville Hospital, Pottstown Memorial Medical Center and Easton Hospital.

The study analyzed the 2012 Medicare cost reports from the Centers for Medicare and Medicaid Services to determine a charge-to-cost ratio, which indicates how much hospitals are marking up charges beyond what Medicare agrees to pay for those with its government-subsidized health insurance.

According to the report, the typical United States hospital charges an average 3.4 times the Medicare-allowable cost in 2012. That means when the hospital incurs $100 of Medicare-allowable costs, the hospital charges $340.

Many hospital patients don’t actually pay the full price, the study says. Government and private health insurers negotiate lower rates for their patients. However, 30 million uninsured Americans are likely to be charged the full rate, as are patients receiving out-of-network care and those receiving workers’ compensation or auto insurance benefits, the report says.

Of the 50 hospitals with the highest price markups, 49 are for-profit hospitals and 46 are owned by for-profit health systems. One health system, Community Health Systems Inc., operates 25 of the 50 hospitals, including all of the listed southeastern Pennsylvania hospitals except for Hahnemann.

“All hospitals affiliated with Community Health Systems offer significant discounts for uninsured patients and charity care for those who qualify. Last year, our organization provided over $3.3 billion in charity care, discounts and other uncompensated care for those who can’t afford healthcare services,” a representative for Community Health Systems told 6-ABC.