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 and payment rates for medical items and health care services that you might receive at each of our 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, Medicaid, and commercial insurers, have independently contracted with hospitals and created payment rates that have limited the relevance of hospital charge systems. Reimbursement under most circumstances is generally limited to negotiated fee schedules and payment rates 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 hospital might generate charges totaling $1,000 for a procedure performed. One insurance company may contract with us to pay $500 for that service, while another insurance company may 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 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 two ways you can view charges and reimbursement rates:
CMS has defined five different types of standard charges that should be available for patients to see:
CMS defines "shoppable services" as services that can typically 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 rates and reimbursement methodologies negotiated with third-party payers 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. 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.