Allegheny Health Network (AHN) is committed to helping consumers understand health care costs. As of January 1, 2021, CMS (the Centers for Medicare and Medicaid Services) requires that hospitals post charges for medical items and health care procedures that you might receive at each of our hospitals to help you compare charges with other hospitals.
Historically, hospitals developed charge systems that were based on very detailed lists of items consumed during the medical stay or medical procedure. Over the years, third-party payers, including Medicare and Medicaid, and commercial insurers, have independently contracted with hospitals, thereby limiting the relevance of hospital charge systems. Reimbursement under those circumstances is generally limited to negotiated fee schedules that are not dependent upon hospital charges. Today, hospital charge systems play a limited role in determining the cost of care paid by consumers or insurance companies.
Hospitals have contracts with insurance companies. These contracts are a result of the hospital and insurer agreeing to a price for each service. When a patient with insurance has that service, the insurance company will pay the hospital whatever the negotiated price is for that service, regardless of the charges generated on the patient bill. For instance: The chargemaster might generate charges for a given procedure of $1,000. One insurance company may contract with us to pay $500 for that service, while another insurance company will contract to pay $450 for that same service. In both cases, charges do not determine the amount paid by the insurance company to the hospital. The difference in charges generated by the chargemaster and the expected contract reimbursement is accounted for by the hospital as a contractual discount. Similarly, CMS also has predetermined prices that it will pay a hospital for services to patients.
Charges generally do not determine what your out-of-pocket costs will be. What you pay in out-of-pocket costs depends on your insurance coverage. Your particular insurance benefit determines your portion of the total payments made by you and your insurer to the hospital. Calling your insurance company is always a good idea if you’re considering an elective procedure and want to get a general idea of your out-of-pocket costs. Your insurance company can help you understand how your coverages and deductibles work as well as your current payment history as an essential first step.
There are three ways you can view our charges:
Each hospital sets a “gross charge” for every individual service rendered to patients within their "chargemaster" or Charge Description Master (CDM). These gross charges do not include any discounts that may be offered, and they serve as the starting point from which payment is negotiated with individual insurance payers for specific insurance plans. As a patient receives services throughout their visit, a charge for each service provided is generated on their account, resulting in a claim that is submitted to the patient’s insurer.
You should know that patients will almost never pay the listed gross charge for health care services. However, under federal law, all insurers, including Medicare and Medicaid, must be billed the amount listed on the chargemaster for those services. These charges are rarely paid in full due to the contracted payment rates negotiated between hospitals and insurers.
Check out this short video on the chargemaster and how it works:
CMS has defined five different types of standard charges that should be available for patients to see:
CMS defines "shoppable services" as services that typically can be scheduled by a patient in advance on a non-urgent basis. CMS requires that all hospitals post at least 300 shoppable services that they perform most frequently.
Each listed service is described in an easy-to-understand way and includes information about standard charges, including the gross charge, discounted cash price, average negotiated charge for each insurance payer, de-identified minimum charge, and de-identified maximum charge.
You can always give us a call if you have questions about your out-of-pocket costs, a bill that you have received, or how to get financial help. Find the right phone number for your question.
The information listed above is based on historical data and is not a guarantee of what you may be charged for a service. Actual charges may differ from those listed for many reasons including the specific services you actually receive, medical conditions treated, and complications. Inpatient charges with varying complexities are grouped by similar procedures, and displayed charge amounts are an average of these services. If you have insurance, your benefits will determine any out-of-pocket costs you might owe, including deductibles, copays, coinsurance, and out-of-pocket maximum amounts.