Price Transparency

1.  How are prices set and who sets them?

 6.  How much will I actually have to pay out of my pocket?

Chargemasters are extensive, often containing tens of thousands of items, or health care services, depending on the facility. While the full charges associated for each item are rarely paid due to the discounts negotiated by private insurers, hospitals use them as a starting point for billing purposes in order to avoid a violation of the Social Security Act, which requires hospitals to charge all patients at the same rate.

If you are uninsured or underinsured, please contact SEARHC Patient Health Benefits to discuss insurance options that are available to you or to find out if you would qualify for our financial assistance program. To speak to someone about insurance options, please call 907-966-8662, 907-966-8920, 907-966-8405 or 907-364-4589.

To speak to someone about our Financial Assistance Program, please call 907-966-8621.

2.  Why are there price differences between hospitals?

7.  How can I use this hospital charge information for comparing prices?

Some organizations have higher cost structures due to the complexity of the service being provided, such as trauma, transplant, or neonatal intensive care, that are extremely expensive to maintain. Some organizations have mission-related costs, such as teaching, research, or providing care for low-income populations.

It is difficult to try to independently compare the charges for a procedure at one facility versus another. An actual procedure is comprised of numerous components from several different departments, room and board, laboratory, other diagnostics, pharmaceuticals, therapies, etc.

3.  What do the following health insurance terms mean?

8.  What is the difference between a facility (technical) charge, a professional charge, and global billing?

Copay means a fixed amount (for example, $20) the patient pays for a covered health care service, such as a physician office visit or prescription.

Coinsurance means the percentage the patient pays for a covered health service (for example, 20% of the bill). This is based on the allowed amount for the service. You pay coinsurance plus any deductibles you owe.

A patient’s specific health care plan coverage, including the deductible, copay and coinsurance, varies depending on the patient’s plan. Health plans also have contracts with differing networks of hospitals, physicians and other providers. Patients need to contact their health plan for this specific information.

The professional component of a charge covers the cost of the physician’s professional services only.

Global charges are when there is no division of the costs associated with a medical service because the service was provided by a single entity. The global charge includes both the professional services as well as all ancillary services (like use of equipment, facilities, non-physician medical staff, supplies, etc.) associated with a patient’s care.

4.  What are some of the different facility types within SEARHC?

9.  What are the different types of healthcare costs?

• Critical Access Hospitals are identified by the Centers for Medicare and Medicaid Services as having met, or eligible to meet, the conditions for becoming a critical access hospital, that is, the hospital: Maintains no more than 25 total beds, including both acute care and/or swing beds and typically keeps patients hospitalized 96 hours or less.

• Federally Qualified Health Center – safety net providers which primarily provide services typically furnished in an outpatient setting. They also include outpatient health programs or facilities operated by a tribe, tribal organization, or by an urban Indian organization.

• Freestanding Clinic or Facility – an entity that furnishes health care services and that is neither integrated with, not a department of, a Hospital. They are a lower cost option to receiving services in an emergency room, but they also only offer a limited amount of services.

Costs to Patients – The cost to patients often includes the total amount of premium payments, deductibles, and co-insurance paid to healthcare providers and health insurance companies for a patient’s healthcare coverage. The cost to patients also includes healthcare supplies and services received within the coverage period. Healthcare services not covered by insurance can be another type of cost, commonly referred to as out-of-pocket costs.

Cost to Providers – Providers are paid by insurers for the services they deliver to patients, but they also incur a considerable amount of operating costs which often get lost in the equation. These costs can include the amount paid for land, buildings, equipment, supplies, wages & benefits, laundry & housekeeping, electronic medical records, as well as services used when delivering care to patients. Providers also absorb the cost of delivering care to patients who are unable to pay for their own care.

Cost to Payors – Payors in the healthcare system include both private insurance companies and government insurance programs. The cost to healthcare payors is the total amount they distribute in patient claims. The second major cost to payors is operating costs such as wages & benefits, supplies, and administrative costs.

5.  What is the difference between charges, cost and price?

10.  How can I get an estimate for a specific procedure?

Cost – For a hospital, it is the total expense incurred to provide the health care. Hospitals have higher costs to provide care than freestanding or retail providers, even for the same type of service. This is because a hospital is open 24 hours a day, 7 days a week and needs to have everything necessary available to cover any and all emergencies. Non-hospital health care providers can choose when to be available and typically would not provide services that would result in a loss.

• • A hospital’s cost of services can vary depending on additional factors such as:
    • Types of services it provides since many vital services are provided at a loss such as trauma, burn, neonatal, psychiatric, ambulance transports and others.
    • Providing medical education programs to train physicians, nurses and other health care professionals, again provided at a loss.
    • More patients with significantly higher levels of illness, yet payment doesn’t cover.
    • A disproportionately high number of patients who are on public assistance or uninsured and unable to pay much if anything toward the cost of their care.

Total Price is the amount actually paid to a hospital. Hospitals are paid by health plans and/or patients, but the total amount paid is significantly less than the starting charges.

Medicare and Medicaid pay hospitals according to a set fee schedule depending on the service provided.

Indian Health Service organizations are the principal health care providers and health advocates for Indian people, and provides a comprehensive health service delivery system for American Indians and Alaska Natives. IHS organizations are paid under a unique methodology referred to as an all inclusive rate for outpatient services. Sometimes the all-inclusive rate is more than the total amount billed. This can be confusing because the patient’s responsibility amount is based on the allowed amount, which in this case is the all-inclusive rate.

Health insurance plans such as workers’ compensation and commercial health insurance, do not pay total charges. Instead, they pay a set price that has been pre-determined or negotiated in advance. The patient only pays the out-of-pocket amounts set by the health plan.

When you call a Financial Counselor, please have the following information available, so that we can provide you with the most accurate estimate possible:

• Description of services needed – we will need to know as much information as possible about the specific services as described by your physician. This should be obtained from your physician’s office.

• Type of Services needed – we need to know if you will be admitted to the hospital as an inpatient overnight, or if you are expected to be treated on an outpatient basis.

• Physician/Specialist Name – example, if you are having surgery, we will want to know the surgeon’s name.

Such estimates will be an average charge for the procedure without complications. A physician or physicians make the determination regarding specific care needed based on considerations using the patient’s diagnosis, general health condition and many other factors.

For example, one individual may require only a one-day hospital stay for a particular procedure, while another may require a two-day stay for the same procedure due to a complication or underlying medical condition. Please allow 3-5 business days for estimate request to be completed.

The patient with health insurance will only pay the specified deductible, copay and coinsurance amounts established by their health plan. Please contact your insurance company to find out more information about how your financial responsibility amount is determined.

A patient without health insurance or sufficient financial resources may be eligible for financial assistance. Please contact a Financial Counselor or Health Benefit Specialist for more information.