McLaren Charge Master Files

Background: The Affordable Care Act and the 2019 IPPS Final Rule

The Affordable Care Act (ACA) included a requirement for hospitals nationwide to establish, update and make public a list of their standard charges for all items and services provided to patients, including for Diagnosis Related Groups (DRG). This information is to be made available each year.

The 2019 IPPS final rule, effective January 1, 2019, revised this requirement to require the chargemaster information to be made available to the public via the internet in “machine-readable” format. A machine-readable format is one that can be automatically read and processed by a computer, such as CSV, XML, etc. PDF and Word documents are not considered machine readable, nor are most Microsoft Excel files. DRG information must be available to patients upon request, but does not need to be online.

Price and Cost Transparency

McLaren Health Care and its subsidiary hospitals throughout Michigan are committed to increased transparency around healthcare costs, including price information for consumers.

  • Our hospitals share cost information with patients every day. The best way for any patient to get meaningful price information is to contact the hospital with their specific treatment needs. Every patient, and every patient’s needs and complications, is different and requires individual attention.
  • Healthcare billing, costs and charges are very complex. Much of hospitals’ costs are for employees’ wages and benefits. The price a patient sees on a hospital bill reflects the people who care for them and otherwise work in the hospital, not just the services, goods or medications provided. Hospitals recognize that more needs to be done to simplify the billing process for patients.
  • Because of widespread variation in health insurance coverage, it is difficult for hospitals to provide patient-specific out-of-pocket cost information without access to very detailed information about a patient’s health insurance coverage.

What is a “chargemaster?”

  • A chargemaster is a comprehensive list of charges for every inpatient and outpatient service provided by a hospital – each test, exam, surgery or other procedures, room charges, etc. In other words, it is the starting point from which the price that is ultimately paid is determined.
  • Given the broad scope of services provided by hospitals 24/7, a chargemaster contains thousands of services and charges.
  • An individual hospital’s charges vary based on its unique range of services, adoption of new medical technologies, government underfunding, patient demographics and other local and regional factors.
  • Health insurance companies contract with hospitals to care for their customers. Hospitals are typically paid contracted rates by insurance companies, which generally are less than the amount listed on the chargemaster. Therefore, chargemaster amounts are rarely billed to a patient or received as payment by a hospital.

How is patient out-of-pocket cost information shared with patients and families?

  • The chargemaster is not a useful tool for consumers who are comparison shopping between hospitals.
  • A hospital employs financial counselors, patient advocates and other resources to help our patients understand their unique financial obligations. We encourage patients to reach out and ask detailed financial questions – especially before scheduled services. The hospital’s financial counselors can review options for charity care, payment plans, discounts and more.
  • People should not try to determine specific out-of-pocket costs for a particular service based on a chargemaster. If a person has health insurance, they should first turn to their own insurance company for co-pay, coinsurance and deductible information. If uninsured, they should contact the hospital’s financial counselors to discuss their personal treatment needs and get an estimated cost of care.
    • In situations where a patient does not have insurance, patients may be eligible for free or reduced-cost healthcare services through various state public assistance programs like the Healthy Michigan plan, as well as the hospital financial assistance programs. Most hospitals have staff who specialize in helping a patient apply for and enroll in Medicaid programs and the Healthy Michigan Plan.
    • In situations where a patient does not have and is not eligible for any insurance, McLaren hospitals have financial assistance policies that apply discounts to the amounts charged. More information on our financial assistance policies can be found on our financial assistance page.

Patients are encouraged to use out-of-pocket cost, quality and patient safety information together to make an informed healthcare purchasing decision. Hospital-specific quality and patient safety information is publicly available at www.verifymicare.org.

Hospital costs for patients vary for a number of reasons.

  • Every patient’s case is unique and requires varying levels of care and specific caregivers making no two patient experiences, even for the same services, the same.
  • The price a patient sees on their hospital bill reflects not just the specific care team who treated them, but also overall operational costs that keep the hospital running 24 hours a day, 365 days a year.
  • Each hospital’s cost and charge structure vary for a variety of reasons including patient complexity; types of services offered; local labor cost; supply and equipment cost; buildings, utility, and maintenance cost; community service programs offered; and other factors.
  • Hospitals provide services to meet individual patient needs 24/7/365, provide free or discounted care to low-income patients and are paid less than cost for services provide to patients covered by governmental insurance programs such as Medicare and Medicaid.