An 'Open' Hospital Chargemaster System is Needed

Every hospital has what's known as a chargemaster, also known as charge description master (CDM). A charge master is a listing of every single procedure that a hospital may provide to its patients. Wikipedia states that  the chargemaster typically serves as the 'starting point' for negotiations with patients and health insurance providers of what amount of money will actually be paid to the hospital. Unfortunately for many in dire medical straights who don't understand hospital billing processes, they may be so overwhelmed that they never think about negotiating with their healthcare provider organization about their bill.

According to HospitalBill.Org, aside from Maryland and California, no state, federal or local law limits what hospitals can charge their patients. Hospitals are free to set their own prices, and each hospital does so in a complex document called the 'chargemaster'. It is well established that chargemaster prices are inflated, vary widely from hospital to hospital, and often have no relation to the actual cost of providing care. 

Insurers, whether public or private, do not pay chargemaster rates. Instead, they negotiate discount rates with each hospital. They are able to do this because they have market power: they can direct patients away from hospitals that charge too much. Self-pay patients, on the other hand, are usually charged the full, inflated chargemaster price for hospital care, and have no leverage to negotiate a discount.

Time Magazine recently published a detailed article written by Steven Brill entitled "Why Medical Bills Are Killing Us". We recommend you take a few minutes to  read it. Frankly, I never heard of a chargemaster until I read this article. It was an eye opener.

Why isn't there a standardized state or national chargemaster document? It seems like this would be a high priority project for the 'Open Health' community to tackle. Why not create a standardized national charge description master or chargemaster and make it available to the public as an 'open access' document? Why not create an 'open access' chargemaster system for use by all hospitals and clinics across the U.S.? 

This is a call to action. If the industry or legislatures can't bring themselves to fix the problem, the 'Open Health' community in the U.S. needs to step up.  Don't let current 'killer' medical billing practices continue. We can do better!



wiki chargemaster

Why can't we create a "wiki chargemaster" by soliciting data from detailed hospital bills from patients in the US? The entries could include data found in a CMS hospital claim row identified only by institution.

After the publication of Stephen Brill's article in TIME, there may be many patients willing to participate. Also, building this dataset might stimulate the creation of a standardized national chargemaster.

The dataset could be made available to anyone who want's to compare costs between institutions. Columns for chargemaster, Medicare, and copay amounts would be very interesting for analysis!