RESOLUTION 61-07, 2004: Hospital Pricing Transparency


WHEREAS: hospitals routinely negotiate many rates with different payers such as insurance companies and the government; and

WHEREAS: as Medicare and insurance reimbursement rates have plummeted, hospitals have cost-shifted operating expenses to patients who self-pay, are typically uninsured, and can least afford the highest rates; and

WHEREAS: self-pay patients are charged much higher rates for hospital services, sometimes inflated 200% to 1,100% more than Medicare or insurance plans pay; and

WHEREAS: in states such as California, Nevada, Arizona, Florida and Alabama, self-pay patients are charged almost three times the hospital’s actual cost, while Medicare and insured patients pay only an average 4% mark up; and

WHEREAS: patients who use their own funds to pay their medical bills should be able to negotiate prices as do insurance companies and the government; and

WHEREAS: since self-pay patients have no way of knowing what other patients are paying for the same services; and

WHEREAS: many hospitals employ the most aggressive collection efforts for self-pay patients often leading to property seizures, garnishment, and financial ruin for the patient; and

WHEREAS: the popularity of Health Savings Accounts in which patients control their own medical expenses will greatly increase the number of self-pay patients;

THEREFORE BE IT RESOLVED THAT: AAPS urges all medical facilities to adopt transparent pricing policies, providing for public disclosure of what it charges self-pay patients for specific service compared to Medicare and the average insurance plan, and for the right of patients to negotiate and appeal charges without retaliation.