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DisclaimerThe information provided for Fall River Health Services in these files are a comprehensive list charges for each inpatient and outpatient service or item provided by the hospital, also known as a chargemaster. It is not a helpful tool for patients to comparison shop between hospitals or to estimate what health care services are going to cost them out of their own pocket. For more information about the cost of your care, please contact our patient service representatives at 605-745-8910 option #2.
Understanding Hospital Charge Information
The amount a hospital bills for a patient's care is known as the "charge". This is not the same as the actual cost or amount paid for the care. The amount collected by a hospital for each service is almost always less than the amount billed. The following are common examples of why hospitals do not receive billed charge:
Government programs such as Medicare and Medicaid typically pay health care providers much less than the billed charge. These payments are determined solely by the government and hospitals have no ability to negotiate the reimbursement rates for government-paid services.
Commercial insurers or other purchasers of health care services usually negotiate discounts with hospitals on behalf of the patients they represent.
Hospitals have policies that allow low-income persons to receive reduced-charge or free care through their financial assistance programs for those who qualify
Negotiations between hospitals and health care purchasers generally begin with the charge amount. While each hospital's charge structure may vary in important ways, charges represent a consistent, though imperfect, way to compare health care costs.
Why Charges May Differ Among Hospitals
There are many reasons that charges may differ among hospitals. Among them are the following:
Payer mix - As with other businesses, hospitals cannot survive if costs exceed revenues over a long period of time. Government programs (like Medicare and Medicaid) generally reimburse hospitals at rates that do not cover the costs they incur to provide care. Therefore, hospitals that have relatively high percentages of government-program patients are forced to recover a greater percentage of their operational costs from privately insured and self-pay patients through higher charges.
Hospital cost structures - Hospitals differ in their approach to pricing based on operational costs. Some hospitals try to spread the cost of all services and equipment among all patients. Others establish charges for specific services based on the cost to provide each specific service. Furthermore, some hospitals may decide, or be forced, to provide certain services at a loss while other hospital operations subsidize the losses. Any of these situations can result in significantly different charges among hospitals for a given type of service.
New technology - The equipment hospitals use to provide services differ in age, sophistication, and frequency of use and may impact charges of the hospital.
Staffing costs - Salary scales may differ by region. Shortages of nurses and other medical personnel may affect regions differently. Where shortages are more severe, staffing costs, and, therefore charges, may be higher.
Service frequency - The per-patient cost of services is generally higher if the type of hospitalization occurs infrequently at the hospital. Furthermore, a single case with unusually high or low charges can greatly affect a hospital's average charge if the hospital reported only a few cases in a given time period.
Documentation/Coding - Hospitals are required to follow correct coding guidelines and to code all the conditions documented in the patient's medical record. The hospital bill will reflect charges to the greatest level of specificity as documented in the medical record by the clinicians. Hospitals vary in their coding systems and personnel and in the number of billing codes they routinely include on a billing form.
Capital expenses - Hospitals differ in the amount of debt and depreciation they must cover in their charge structure. A hospital with a lot of debt may have higher charges than a hospital not facing such expenses. Furthermore, hospitals may choose to lease or purchase equipment or facilities. The choices made about financing of capital projects may affect charges in different ways.
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