How Useful Are Chargemasters for Price Transparency in Dermatology?

Chargemaster lists may encourage patients to shop around for services, but the authors of this report said the implications of this change for dermatology are not well-defined.

A recent study examined the utility of hospital chargemasters as decision-making tools for uninsured or self-pay individuals needing dermatology care.

In a move to increase price transparency for consumers, CMS in 2019 required hospitals to publish or make available their gross pricing for procedures, but many hospitals published their chargemaster lists instead, which may be difficult to interpret.

Chargemaster lists may encourage patients to shop around for services, but the authors of this report said the implications of this change for dermatology ares not well-defined.

In this study, they analyzed pricing differences for 2 families of codes, skin biopsy procedures and destruction procedures for benign/premalignant lesions.

Similarly to other studies, the authors found that chargemaster lists were difficult to use and that there was wide variation in pricing. In addition, they found no correlation between prices and US regions or hospital sizes.

The authors reviewed chargemasters from the 5 largest hospitals in each state (n = 250) and reviewed procedure prices, presence of Current Procedural Terminology (CPT) codes, presence of abbreviations for terminology (biopsy/tangential/destruction), public accessibility, readability (defined as written in English), and formatting of chargemasters.

Results showed:

  • 96% (240/250) of chargemasters were publicly accessible
  • 96% (230/240) of chargemasters listed procedure names in addition to codes, although many used abbreviations
  • Abbreviated terminology for “biopsy” (40%; 96/240), “tangential”(24%; 58/240), and “destruction”(43%; 102/250) were common
  • Approximately 69% (165/240) of chargemasters included CPT codes
  • Formats included text files (16%, n = 38/240), spreadsheets (69%, n = 165/240), searchable website databases (13%; n = 30/240), and webpage/PDF files (3%; n = 7/240)

The maximum gross prices for dermatological procedures ranged up to 470-fold higher magnitude than the minimum. Additionally the median prices were up to 48-times higher than respective national Medicare fees.

Some examples of price ranges included:

  • Single tangential biopsy, $90-$14,450
  • Single punch biopsy, $99-$5106
  • Incisional biopsy of skin, $99-$31,991
  • Destruction of first premalignant lesion, $61-$6023
  • Destruction of cutaneous vascular proliferative lesions, $206-$19,365
  • Destruction of benign lesions, $49-$19979

Price variability may be due to hospital location and amenities, different accounting methods for converting hospital charges to prices, or reporting of the full cycle of care versus a discrete procedure, the authors wrote.

It could also be “a result of some hospitals reporting the price of a family of CPT codes versus those which do not use CPT codes in their chargemaster reporting different values. Inflated, inaccurate, or inconsistent pricing may discourage or delay patients from receiving necessary care and undermine the goal of transparency,” they wrote.

One limitation of their study, the authors noted, is that most dermatology procedures are not conducted in hospitals.

While there may be some usefulness in these lists for patients paying out-of-pocket, “chargemasters in their current form require further standardization and enhancement of readability and access to improve their usefulness for prospective patients,” they concluded.

This was originally posted by AJMC.

Reference

Yang K, Drake L, Ghatnekar S, et al. Evaluating chargemaster price transparency for dermatologic procedures: a national analysis. J Am Acad Dermatol. Published online May 2, 2022. doi:10.1016/j.jaad.2022.04.049.