Texas Health Resources is part of a new lobbying alliance. Photo: Texas Health Resources

Several hospital systems are lobbying Medicare to stop basing certain payments on their sticker prices, also known as "chargemasters" — prices the Trump administration has required them to disclose publicly.

The intrigue: Hospitals aren't advocating for lower Medicare payments. They want to reduce the prices they list publicly, while retaining the same Medicare revenues.

How it works: Hospitals have a chargemaster that lists the rack rates of every service, test and procedure.

  • Those prices are relevant for people who are uninsured and for people who get out-of-network services, but they don't reflect the net price that's negotiated with private health insurers.
  • However, Medicare bases a handful of hospital payments based on those chargemaster prices — including things like "outlier" payments for patients who are extraordinarily expensive.

​Driving the news: Six hospital systems — Advent Health, Baptist Health, Geisinger, SSM Health, Texas Health Resources and Trinity Health — and the Healthcare Financial Management Association, a trade organization for hospital executives, are each paying $2,000 a month to fund the Chargemaster Alternatives for Medicare Payment Alliance.

  • They essentially want Medicare to do away with payment formulas that take those list prices into account.
  • Rick Gundling, a vice president at HFMA, said in an interview the changes would allow hospitals to "rationalize their charge structure" and "allow for better transparency."
  • The hospital systems either did not respond to requests for comment or did not make executives available for interviews.

The bottom line: Hospitals don't like having to post their high chargemaster rates. It's embarrassing, but they also argue the rates are misleading because they don't reflect patients' out-of-pocket costs.

  • If hospitals convince Medicare to calculate outlier and other niche payments on costs instead of charges, and guarantee the payments won't go down, they would get a PR win for potentially lowering some list prices and a financial win for not sacrificing revenue.

Go deeper

Updated 11 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: The swing states where the pandemic is raging — Pence no longer expected to attend Barrett confirmation vote after COVID exposure.
  2. Health: 13 states set single-day case records last week — U.S. reports over 80,000 new cases for second consecutive day.
  3. Business: Where stimulus is needed most.
  4. Education: The dangerous instability of school re-openings.
  5. World: Restrictions grow across Europe.
  6. Media: Fox News president and several hosts advised to quarantine.
Dave Lawler, author of World
37 mins ago - World

U.S.-brokered ceasefire collapses in Nagorno-Karabakh

Volunteer fighters in Stepanakert, the capital of Nagorno-Karabakh. Photo: Aris Messinis/AFP via Getty Images

A U.S.-brokered ceasefire between Armenia and Azerbaijan in the disputed territory of Nagorno-Karabakh crumbled within hours on Monday, leaving the month-old war rumbling on.

Why it matters: Nearly 5,000 people have been killed, according to Vladimir Putin’s rough estimate, including more than 100 civilians. Between 70,000 and 100,000 more are believed to have fled the fighting.

Ben Geman, author of Generate
3 hours ago - Energy & Environment

Japan's big new climate goal

Climate protest in Tokyo in November 2019. Photo: Carl Court/Getty Images

Japan's new prime minister said on Monday the nation will seek to become carbon neutral by 2050, a move that will require huge changes in its fossil fuel-heavy energy mix in order to succeed.

Why it matters: Japan is the world's fifth-largest source of carbon emissions. The new goal announced by Prime Minister Yoshihide Suga is stronger than the country's previous target of becoming carbon neutral as early as possible in the latter half of the century.

Get Axios AM in your inbox

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Subscription failed
Thank you for subscribing!