At first thought, a new federal rule that requires all hospitals to post out-of-pocket costs of medical procedures would seem to help consumers.

They could compare prices from hospital to hospital and get a clearer picture of how much their procedure will cost.

But according to Alomere Health leaders in Alexandria - and other hospitals throughout the country - it's not working out that way, at least for now.

All in details

Alomore has prices listed on its website - under "patient resources" - but they're in an Excel spreadsheet that contains more than 8,900 line items, which takes up 382 pages of single-spaced data.

Also, the procedures are listed in medical language and acronyms that make sense to the hospital but not for everyday consumers. Two examples from Alomere:


C1776 PSN TIB STM 5 DEG SZ D R - $1,475.

There are pages upon pages of such data in the spreadsheet, known in the health care industry as "chargemasters." They are a hospital's bible for the services they offer but they're just the starting point for negotiations over how much care will ultimately cost.

Also, the numbers don't represent what most patients would pay. Instead, they represent the amount their insurer or the government would be billed.

The items listed are also very specific and pertain to only a single expense in a procedure. Nate Meyer, chief financial officer at Alomere, explained that when patients have a knee or hip replacement at the hospital, 10 or 11 departments can be involved, each with their own charges.

Beyond the surgery itself, there are also charges related to recovery, surgical floor room, laboratory, pharmacy, respiratory, radiology and therapy to name a few, Meyer said.

That's just the tip of a very complex iceberg of billing procedures that patients end up paying.

Meyer explained that the hospital works with 126 insurance companies, all paying different reimbursement rates, including 36 workers compensation plans and 17 automobile insurance companies.

Patients covered by commercial insurance products have negotiated rates with hospitals, and patients covered by Medicare or Medicaid programs have hospital reimbursement rates determined by federal and state governments.

Spreadsheet limited

The bottom line: Much more goes into the billing process than can be reflected in a spreadsheet.

"The listing isn't very useful to the consumer," said Carl Vaagenes, chief executive officer at Alomere. "It's best for people to call the hospital and to also call their insurance company for an estimate."

The new rule, required by the U.S. Department of Health and Human Services and Centers for Medicare and Medicaid Services, took effect Jan. 1. So far, the hospital hasn't received much feedback about prices that are posted on the website, according to hospital leaders.

Hospitals realize that clarity in pricing won't happen overnight.

"The first step is going to be confusing for patients," said Tiffany Lawrence, a finance executive at Sanford Health in Fargo. "What it provides is a stepping stone toward greater transparency."

Sanford Health in part blames the Centers for Medicare and Medicaid Services for not being clear enough in the new rule, which requires hospitals to post their "current, standard charges."

"The regulation was very vague, so hospitals across the country are doing their best to apply it," said Lawrence, explaining that no standard format or definition exists for what hospitals need to post, meaning information will vary widely between providers.

"CMS will get more specific as it realizes this," she added.

The Centers for Medicare and Medicaid Services said it has reached out to health care providers and other stakeholders for suggestions on how to standardize terms and price listing.

Alex Derosier with the Forum News Service contributed to this story.