Hospital prices vs. what insurers pay

Why show list prices at all?

A fair objection: hardly anyone pays a hospital's list price. It works mostly as an opening number that discounts are negotiated down from, and an insured patient treated in network should be billed at their plan's negotiated rate instead. We agree, which is why every comparison here puts the list price next to what insurers actually pay, and each hospital's page also shows its cash price.

But the list price still reaches real patients:

• Uninsured patients are often billed from it first, and only see a lower price if they ask for the cash price or apply for financial assistance.
• Out-of-network care can be billed from it. The No Surprises Act protects patients in emergencies and in some in-network settings, but not every out-of-network bill.
• Some insurer contracts pay a percentage of it. Several files we read set certain insurers' rates as a share of billed charges, so a higher list price means a higher payment.
• It is what appears on an itemized bill. For many people it is the first price they ever see for their care, and the gap shown here is what they need to know to question it.

Another common point is that hospitals are paid per stay, not per item, often through diagnosis-related groups (DRGs). That is true for many inpatient stays. The services compared here are mostly outpatient ones, such as ER visits, scans and lab tests, which hospitals' own files price service by service. Where a rate usually covers a whole case, as with surgery, we left the service out of the comparison rather than compare unlike numbers.

Why this matters if you got a bill

A list price is the hospital's full charge before any discount. Insured patients treated in network should be billed based on their plan's negotiated rate, and uninsured patients can usually ask for the hospital's cash price or financial assistance. When a bill shows a charge near the list price, it is worth asking why.