Philadelphia hospitals top Pittsburgh’s on Medicare fees

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Phil­a­del­phia hos­pi­tals gen­er­ally bill at higher rates than Pitts­burgh’s when it comes to the most com­mon Med­i­care in­pa­tient pro­ce­dures, ac­cord­ing to a re­port from U.S. Centers for Med­i­care & Med­ic­aid Ser­vices.

Hos­pi­tals in both cit­ies bill Med­i­care above the na­tional av­er­age, and more than their hos­pi­tal coun­ter­parts in ru­ral and sub­ur­ban parts of the state, ac­cord­ing to the data in the an­nual re­port, which was re­leased June 1.

“Med­i­care Pro­vider Utiliza­tion and Pay­ment Data: In­pa­tient” de­tails charges that over 3,000 U.S. hos­pi­tals sub­mit­ted to Med­i­care in fis­cal year 2012, for the top 100 most fre­quently billed cat­e­go­ries of di­ag­no­ses for hos­pi­tal pa­tients ad­mit­ted for mul­ti­ple nights.

Be­cause the data fo­cus on in­pa­tient ad­mis­sions, it doesn‘‍t in­clude reg­u­larly sched­uled spe­cial­ist ap­point­ments or out­pa­tient pro­ce­dures.

Anal­y­sis by the Post-Ga­zette of 10 com­mon ail­ments in Penn­syl­va­nia listed in the re­port re­vealed that Phil­a­del­phia hos­pi­tals charge Med­i­care more than hos­pi­tals in Pitts­burgh do, though cer­tain ail­ments are ex­cep­tions.

Both Pitts­burgh and Phil­a­del­phia hos­pi­tals charged more than the $38,236 state av­er­age for heart fail­ure with ma­jor com­pli­ca­tions — Pitts­burgh hos­pi­tals by an av­er­age of $33,000 and Phil­a­del­phia hos­pi­tals by $31,000.

But in other di­ag­no­sis cat­e­go­ries — such as chest pain and re­spi­ra­tory is­sues with com­pli­ca­tions — Pitts­burgh hos­pi­tals charged less than half of what Phil­a­del­phia hos­pi­tals did.

It is not un­usual for ur­ban hos­pi­tals to have higher bill­ing rates. In cit­ies such as New York, Los An­ge­les and Miami, hos­pi­tals bill Med­i­care as much as three times the na­tional av­er­age. Ur­ban cen­ters are usu­ally home to larger and more ex­pen­sive teach­ing hos­pi­tals, as well as trauma cen­ters that see more com­pli­cated cases.

In re­al­ity, the bill­ing rates have lit­tle bear­ing on what Med­i­care ac­tu­ally pays for the pro­ce­dures, be­cause re­im­burse­ments to hos­pi­tals are a mat­ter of fed­eral pol­icy, with fee sched­ules that set the max­i­mum pay­ment rates. Med­i­care is the fed­eral health in­sur­ance pro­gram for se­nior cit­i­zens.

But while the rates don’t com­port with ac­tual re­im­burse­ment — or ac­tual fees and co-pays paid by Med­i­care re­cip­i­ents — the re­ports are of­ten used by re­search­ers look­ing for treat­ment trends or seek­ing in­sight into how to con­trol ex­penses.

“This in­for­ma­tion can be used to im­prove care co­or­di­na­tion and health out­comes for Med­i­care ben­e­fi­cia­ries na­tion­wide,” said Bryan Sivak, chief tech­nol­ogy of­fi­cer in the U.S. Depart­ment of Health and Human Ser­vices. “We are look­ing for­ward to see­ing what the com­mu­nity will do with” the data.

In Penn­syl­va­nia, hos­pi­tals state­wide charged an av­er­age of $51,426 for an­other fre­quent di­ag­no­sis cat­e­gory, ma­jor co­lon sur­ger­ies. Pitts­burgh hos­pi­tals charge on av­er­age $48,208, and Phil­a­del­phia hospitals $75,619.

In Penn­syl­va­nia in 2012, ma­jor joint re­place­ment — knee re­place­ments, hip re­place­ment and ma­jor limb and foot sur­gery — was the most fre­quently billed dis­charge, fol­lowed by sep­sis-re­lated in­fec­tions.

Nei­ther of the two big­gest med­i­cal sys­tems in Pitts­burgh — UPMC and High­mark’s Al­le­gheny Health Net­work — dis­played trends of ex­treme over- or un­der-charg­ing, ex­cept in se­lect in­stances. UPMC Pres­by­te­rian and UPMC Shadyside, which for bill­ing pur­poses are con­sid­ered one in­sti­tu­tion, con­sis­tently charged over the state av­er­age while St. Clair Me­mo­rial Hos­pi­tal and UPMC Mercy charged un­der.

Su­san Manko, di­rec­tor of me­dia re­la­tions for UPMC, said the hos­pi­tal sys­tem is “deeply en­gaged” in look­ing for new mod­els of cost-ef­fec­tive care. “UPMC pro­vides a ro­bust fi­nan­cial as­sis­tance pro­gram for pa­tients,” she added.

While hos­pi­tals say the billed rates don’t mat­ter since Med­i­care ben­e­fi­cia­ries and un­der-65 pa­tients with com­mer­cial in­sur­ance don’‍t pay the full rates, some health pol­icy ex­perts say there are in­stances in which a hos­pi­tal’s rates do af­fect the pa­tient.

Ge­rard Ander­son, di­rec­tor at the Center for Hos­pi­tal Finance and Man­age­ment at Johns Hop­kins Univer­sity, said un­in­sured pa­tients — as well as those from other coun­tries — will feel the ef­fect of these up­ward trends. Pa­tients in­sured un­der worker’s com­pen­sa­tion or who have in­sur­ance out of a hos­pi­tal’s net­work may also have to pay at least a por­tion of the billed rate.

Na­tional av­er­age charges for all re­ported di­ag­no­sis groups in­creased from 2011 to 2012, CMS re­ported.

Max Rad­win: mrad­win@post-ga­ or 412-263-1280 or via Twit­ter @Max­Rad­win.

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