What’s The Price? Simple Question, Complicated Answer In Medicare



I wrote to Medicare a while back, asking for a price. I know nothing is simple in the world of health care costs, but I just needed one number, a number Medicare uses all the time, I supposed, to calculate payments to doctors and hospitals.

Here’s what I wanted to know: How much does Medicare pay a particular hospital in Boston for a colonoscopy? (It was for a story I wrote about searching for the best colonoscopy.)

The first emailed response I got, at a time when the system is supposed to be working toward more price transparency, was barely in English.

For the inpatient hospital side:

If you want to calculate a hospital specific DRG payment for a specific fiscal year, look at that year’s IPPS Impact file to get the hospital’s wage index.

Then you can look at Table 5 for the FY 2009 Final Rule to get the relative weights for the MS-DRGs you are interested in. Finally, you can determine the FY 2009 labor related share and non-labor related share rates from Table 1A in the FY 2009 Final Rule.

These files and tables can be found here: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Acute-Inpatient-Files-for-Download-Items/CMS1247872.html

Then the hospital specific DRG payment can be calculated as follows: (wage index x labor related share + non-labor related share) x DRG relative weight.

For the outpatient side:

Medicare Part B data by procedure code for specific years are posted: http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/NonIdentifiableDataFiles/PartBNationalSummaryDataFile.html Data are presented by 5-digit code so you would need to know the code for CT scan and MRI. Code range categories are identified in the readme file which is included in the zipped file.

A colonoscopy for the inpatient side does not affect the MS-DRG assignment. You will only be able to narrow it down by looking at the procedure codes. Below are the two most common reported.

ICD-9-CM procedure code 45.23, Colonoscopy

ICD-9-CM procedure code 45.25, Closed [endoscopic] biopsy of large intestine – this code includes colonoscopy with biopsy

So I write back to Medicare. Really, I ask, is this what I have to do to find out how much you pay a hospital for a basic test? Well, says the Medicare media contact, that’s the calculation if you have the test in a hospital. Since many colonoscopies are done in outpatient clinics, you could also follow these instructions:

Addendum A for January 2013
http://www.cms.gov/apps/ama/license.asp?file=/hospitaloutpatientpps/downloads/January-2013-Web-Addendum-A.zip

APC 0158 looks like it would be the correct APC

The quarterly Addenda A and B that are used for payment are at

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html

I clicked that first link, accepted the terms of use, and found a spreadsheet with several thousand procedures and prices.

AND, the answer to my question is (drum roll please)…$611.77.

I’m going to keep that second link handy (not the table, because it will be updated periodically) for Medicare’s outpatient prices. I still have no idea how I would calculate what Medicare pays for tests and procedures that happen inside a hospital.

This is important because Medicare prices are often the basis for negotiations between insurers and hospitals or physician groups. To know if a certain hospital is charging a lot more than what’s considered reasonable for a procedure, it helps to know the Medicare price — if you can find it.

Medicare does a lot of cool things. The Blue Button (and the new iBlueButton app) has been helpful several times in monitoring my mom and my sister’s health care record. So why is it so hard to calculate what a hospital is paid? I’m still searching for that answer.

I’ve asked, several times, to speak to the Ombudsman at Medicare to find out how this vast agency plans to make prices more accessible. And I hope to post an update soon.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

This story is part of a collaboration that includes WBUR, NPR and Kaiser Health News.