Aug. 24--Once Pennsylvania Insurance Department officials sign off on Highmark's transition plan for separating from UPMC, Highmark members may learn they have more access to UPMC physicians and facilities than they expected -- but it could come at a very steep price.
They also may soon become familiar with a new term: chargemaster.
The chargemaster is a hospital's master list of how much it will charge for services, including every treatment, test, scan and aspirin. But, unlike a restaurant that lists meal prices on a menu, the hospital prices are secret and -- almost uniformly -- many times higher than what the service actually cost the hospital to provide.
Most patients are not affected by charges because their insurer pays a pre-determined rate and the patient knows upfront what their deductible and co-payment will be. But those without insurance, or who are out-of-network, have no such protection.
"People need to know there's no rhyme or reason to what goes into your bill," said Robert Cicco, a neonatologist with the Allegheny Health Network. "The system we have set up is totally discriminatory against people who are either underinsured or uninsured."
Beginning Jan. 1, people carrying a Highmark card in their wallet may feel its effects more than in the past.
As the region awaits details about the Pittsburgh insurer's formal transition plan, which should become public in the next week or two, the June 27 consent decree signed by Highmark and UPMC -- presented as a "framework" for the transition plan -- said UPMC out-of-network rates could not exceed 60 percent of its charges.
While a 40 percent discount sounds like a bargain at the shopping mall, the same is not true for hospital charges. UPMC declined to provide specific information on its hospital charges, but some examples have come out:
--In February, the Post-Gazette reported on a Butler family whose hospital charges for cancer treatment at UPMC Passavant were five times more for the same procedures, tests and medications received at Johns Hopkins in Baltimore a few weeks earlier. Fortunately, the family's insurance covered nearly all of the cost.
--The U.S. Centers for Medicare and Medicaid last year released data showing that implanting a pacemaker, for example, carries an average charge of $89,793 at UPMC Presbyterian-Shadyside, while Allegheny General's average charge was $56,364. By comparison, the average charge at Heritage Valley Sewickley is $22,365.
--In January, a California nurses union issued a report on hospital charges that found that UPMC Presbyterian-Shadyside charges more than eight times its costs, 40th-highest among U.S. hospitals.
UPMC is not unique among major U.S. health systems, nor are its charges the most eye-opening.
Earlier this month, a New York affiliate for NBC reported that a New Jersey hospital billed a teacher more than $8,500 to bandage a cut finger that had not healed after he sought care at an out-of-network facility. The itemized breakdown: $8,200 for an emergency room visit with no X-rays, $180 for a tetanus shot, $242 for sterile supplies and $8 for antibacterial ointment.
Also this month, researchers at the University of California, San Francisco reported hospital charges for a simple blood cholesterol test in that state ranged from $10 to $10,169. Similar variations showed up for nine other common blood tests.
"Everybody knows that [the chargemaster] has no relation to reality," said Gerard Anderson, director for the Center for Hospital Finance and Management at the Johns Hopkins Bloomberg School of Public Health.
He noted a common rationale is that the charges must make up for the discounted payments negotiated with commercial insurers. "So I guess what the hospitals are saying is, 'We're going to make it up on the backs of the people who cannot afford it very well.'"
The chargemaster and accompanying out-of-network costs carry risks for both UPMC and Highmark. If people opt for a lower premium, narrower network plan such as Highmark's Community Blue, UPMC's health system l