News - Indiana Hospital Chargemaster Rates Questioned
A recent Indiana Court of Appeals decision has again put a hospital’s chargemaster rates in the crosshairs, and it may lead to an overarching ruling from the Indiana Supreme Court on patients’ rights to see and negotiate hospital bills in the future.
In the United States, the chargemaster, also known as charge master, or charge description master (CDM), is a comprehensive listing of items billable to a hospital patient or a patient's health insurance provider. In practice, it usually contains highly inflated prices at several times that of actual costs to the hospital.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. It is described as "the central mechanism of the revenue cycle" of a hospital.
The decision, Parkview Hospital v. Thomas E. Frost by Shirley A. Riggs, his guardian, 02A03-1507-PL-959, was an appeal from Allen Circuit Court. In the decision, Senior Judge Ezra Friedlander and Chief Judge Nancy Vaidik ruled Thomas Frost was entitled under the Indiana Hospital Lien Act to discover what insured patients were being charged for similar expenses after he was charged more than $600,000 for a three-month stay at the hospital in Fort Wayne. Parkview argued Frost was bound by the contract he signed and asked the court to determine its chargemaster rates were reasonable, but the COA upheld the decision of the trial court.
Judge Edward Najam’s dissent in the case has added fuel to the debate. The COA majority based its decision on Stanley v. Walker, 906 N.E.2d 852 (Ind. 2009), but Najam thought Allen v. Clarian Health Partners Inc., 980 N.E.2d 306 (Ind. 2012) should have controlled. In Allen, the Supreme Court said patients did not state a claim upon which relief could be granted and they had to pay what the hospital charged them. Najam said he didn’t like Allen because the case puts patients “at a permanent take it or leave it disadvantage.”
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