On May 8, 2013, Secretary of the Department of Health and Human Services (HHS), Kathleen Sebelius, announced the posting by the Center for Medicare & Medicaid Services (CMS) of hospital-specific charges for the more than 3,000 U.S. hospitals that receive Medicare payments under the Inpatient Prospective Payment System (IPPS). The data pertain to the top 100 most frequently billed discharges for fiscal year 2011 and the discharges represent almost 7 million or 60 percent of the total Medicare IPPS discharges. The data reveal significant variation in hospital charges for inpatient services.

The Secretary also announced that HHS is making approximately $87 million available to states to enhance their rate review programs and further health care pricing transparency. As part of this effort, HHS is providing funding for data center collection, analysis and publication of health pricing and medical claims reimbursement information. Funding will be used, for example, by the Robert Wood Johnson Foundation, which is planning a “data visualization challenge that will further the dissemination of data to larger audiences.”

According to the Secretary, these efforts reflect the Department’s work to increase health care pricing transparency. It would seem that a significant point in the release of these data is to highlight the variation in hospital charges across the country and within communities. However, there is no discussion in the release of the current relevance of charges under IPPS or other payment methodologies, or the relationship between charges and the amounts for which consumers are ultimately liable. Thus, while the data released by CMS are interesting to marketplace participants, it is unclear whether or how consumers would be able to use these data appropriately in making health care purchasing decisions.

To access the press release and hospital charge data spreadsheets click here and here.