In the United States, the chargemaster, also known as charge master, or charge description master (CDM), is a comprehensive listing of items billable to a hospital patient or a patient’s health insurance provider. … It is described as “the central mechanism of the revenue cycle” of a hospital.
Hospitals don’t have uniform practices or guidelines for setting or changing prices. It is an administrative decision, largely independent of any market trends. One facility may raise prices for a procedure by 20%, while another keeps the cost low. In addition, the basis for charges is all over the map; one hospital may assign one overall price for a procedure, while another issues line item charges for specific portions of the service.
Meet The Villain of Hospital Costs: The Chargemaster
by Christopher Moriates, MD
Author of Understanding Value-Based Healthcare*
The hospital chargemaster has become nearly a household term, following its turn as the villain in highly publicized features in Time magazine, The New York Times, and the The Daily Show. Nobody seems to like the chargemaster. But what exactly is it and how does it relate to hospital costs?
The first step is to understand basic hospital accounting terms including “costs,” “charges,” “prices,” and “reimbursement”: (READ FULL STORY …)