{{Short description|Chargeable items billed to a hospital patient}} {{for|the British electric vehicle charging infrastructure company|Chargemaster (company)}} 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. In practice, it usually contains highly inflated prices at several times that of actual costs to the hospital.<ref name="NYT-20130731">{{cite news |last=Rosenberg |first=Tina |title=Revealing a Health Care Secret: The Price |url=http://opinionator.blogs.nytimes.com/2013/07/31/a-new-health-care-approach-dont-hide-the-price/ |date=July 31, 2013 |work=The New York Times |accessdate=August 1, 2013 }}</ref><ref name="NYT-20130601">{{cite news |last=Rosenthal |first=Elisabeth |title=The $2.7 Trillion Medical Bill – Colonoscopies Explain Why U.S. Leads the World in Health Expenditures|url=https://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html|date=June 2, 2013 |work=The New York Times |accessdate=August 1, 2013 }}</ref><ref name=brill /> The chargemaster typically serves as the starting point for negotiations with patients and health insurance providers of what amount of money will actually be paid to the hospital. It is described as "the central mechanism of the revenue cycle" of a hospital.
==Description== The chargemaster may be alternatively referred to as the "charge master", "hospital chargemaster", or the "charge description master" (CDM).<ref name="peden">{{cite book|last=Peden|first=Ann|title=Comparative Health Information Management|pages=41–43|year=2011|publisher=Delmar Cengage Learning|isbn=978-1111125622}}</ref><ref name="howard">{{cite book|first=Carla |last=Tyson-Howard|author2=Shirlyn C. Thomas|title=The Comprehensive Review Guide for Health Information: RHIA & RHIT Exam Prep|pages=49–51|year=2009|publisher=Jones and Bartlett Publishers, LLC|isbn=978-0-7637-5661-1}}</ref> It is a comprehensive listing of items billable to a hospital patient or a patient's health insurance provider.<ref name="brill" /><ref name=oshpd /> It is described as "the central mechanism of the revenue cycle" of a hospital.<ref>{{cite news|url=http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/5-things-hospitals-should-know-about-their-chargemaster-and-icd-10.html |title=5 Things Hospitals Should Know About Their Chargemaster and ICD-10 |first=Bob |last=Herman |work=Becker's Hospital Review |date=October 3, 2012|accessdate=March 4, 2013|publisher=ASC Communications}}</ref> Chargemasters include thousands of hospital services, medical procedures, equipment fees, drugs, supplies, and diagnostic evaluations such as imaging and blood tests.<ref name=oshpd /> Each item in the chargemaster is assigned a unique identifier code and a set price that are used to generate patient bills.<ref name=oshpd /> Every hospital system maintains its own chargemaster.<ref name=oshpd>{{cite news|url=http://www.oshpd.ca.gov/HID/Products/Hospitals/Chrgmstr/index.html |title=Healthcare Information Division: Annual Financial Data – General Information About the Hospital Chargemaster Program |author=State of California Office of Statewide Health Planning and Development|work=OSHPD – HID |date=August 8, 2012 |accessdate=March 4, 2013|publisher=State of California}}</ref> Traditionally, hospitals regarded their chargemaster, alongside the medical codes that catalogue the billing items, as a trade secret that is central to their business, and state laws and courts have historically accepted the view that these are proprietary information.<ref>{{Cite news|url=https://www.nytimes.com/2017/03/29/magazine/those-indecipherable-medical-bills-theyre-one-reason-health-care-costs-so-much.html|title=Those Indecipherable Medical Bills? They're One Reason Health Care Costs So Much.|last=Rosenthal|first=Elisabeth|date=2017-03-29|work=The New York Times|access-date=2017-04-03|issn=0362-4331}}</ref><ref name="CMSsource">{{cite web |title=Hospital Price Transparency |url=https://www.cms.gov/hospital-price-transparency |website=Centers for Medicare and Medicaid services |access-date=21 May 2022}}</ref>
The procedure of developing, maintaining, and monitoring the chargemaster and its pricing scheme often necessitates multiple hospital employees working under the supervision of a "chargemaster coordinator",<ref name="abbey">{{cite book|last=Abbey|first=Duane C.|pages=2–4|title=Chargemasters: Strategies to Ensure Accurate Reimbursement and Compliance|publisher=Opus Communications|year=2005|isbn=1578396301}}</ref><ref name="davis" /> a "charge master manager", or others in the health care system's operations or administrative support areas frequently called a "charge master team".{{citation needed|date=June 2013}} Ultimate responsibility for ensuring accuracy of the chargemaster rests with each hospital's chief financial officer,<ref>{{cite journal|title=The Cash Nexus|first=Carl E. |last=Schneider|journal=Hastings Center Report |volume= 37|issue=4|date= July 2007|pages= 11–12 | doi=10.1353/hcr.2007.0061|pmid=17844914|publisher=Project MUSE|s2cid=9278168 }}</ref> compliance officer, and hospital Board.{{citation needed|date=June 2013}} Approximately forty percent of hospitals pay outside companies to help create and then adapt their chargemasters on a yearly basis.<ref name="davis">{{cite book|last=Davis|first=T. Neil|title=Mired in the Health Care Morass|pages=[https://archive.org/details/miredinhealthcar00davi/page/54 54–55]|publisher=Ester Republic Press|year=2008|isbn=978-0974922140|url=https://archive.org/details/miredinhealthcar00davi/page/54}}</ref> According to ''Essentials of Managed Health Care'', as of 2012 the chargemaster file typically included between 20,000 and 50,000 price definitions.<ref>{{Cite web|url=http://www.kongstvedt.com/Errata%20Sheet%20for%20the%206th%20Edition.pdf|title=Errata Sheet for The Essentials of Managed Health Care, Sixth Edition, Jones & Bartlett.|last=Kongstvedt|first=Peter|date=|website=|publisher=|access-date=}}</ref><ref name="kongstvedt">{{cite book|title=Essentials of Managed Health Care|last=Kongstvedt|first=Peter Reid|pages=114–115|publisher=Jones & Bartlett Learning|year=2012|isbn=978-1449604646}}</ref> The Lewin Group analyzed utilization of the chargemaster and found that a low proportion of hospitals carried out regular reviews of their chargemaster implementation.<ref name="bartlette">{{cite book|last=Bartlette|first= Linda A. |author2=Ida F. Lawso|pages=11–13|title=Health Care Policies|year=2008|publisher=Nova Science Pub Inc|isbn=978-1604563528}}</ref> Costs for patients maintained on the chargemaster differ greatly from hospital to hospital.<ref name="hammaker">{{cite book|last=Hammaker|first=Donna K. |author2=Sarah J. Tomlinson|title=Health Care Management and the Law: Principles and Applications|url=https://archive.org/details/healthcaremanage00hamm|url-access=limited|pages=[https://archive.org/details/healthcaremanage00hamm/page/n177 152]–154|year=2010|publisher=Delmar Cengage Learning|isbn=978-1428320048}}</ref>
Authors J. Patrick Rooney and Dan Perrin note in their book ''America's Health Care Crisis Solved'', "Charge-master rates, in reality, serve as nothing more than the starting point for negotiations" with the payer.<ref name="rooney">{{cite book |last1=Rooney |first1=J. Patrick |first2=Dan |last2=Perrin |pages=[https://archive.org/details/americashealthca0000roon/page/137 137–139] |title=America's Health Care Crisis Solved: Money-Saving Solutions, Coverage for Everyone |year=2008 |publisher=Wiley |isbn=978-0470275726 |url=https://archive.org/details/americashealthca0000roon/page/137 }}</ref> The impact of the chargemaster is such that those with good insurance or better access to means to afford quality healthcare pay the least for that care, whereas conversely uninsured, and others who pay out-of-pocket for healthcare pay the full chargemaster listed price for the same services.<ref name="henderson">{{cite book|last=Henderson|first=James W.|pages=269–271|title=Health Economics & Policy |publisher=South-Western College Pub|year=2008|isbn=978-0324645187}}</ref><ref>{{cite book|page=212|title=Managed Care: What It Is and How It Works|first=Peter |last=Kongstvedt|publisher=Jones & Bartlett Publishers|year=2009|isbn=978-0763759117}}</ref>
==Existing legislation and regulations==
Federally all hospitals are now required to post their chargemaster on the hospital website.<ref>{{cite web | url=https://www.cms.gov/hospital-price-transparency | title=Hospital Price Transparency | CMS }}</ref>
Hospital price transparency helps Americans know the cost of a hospital item or service before receiving it. Starting January 1, 2021, each hospital operating in the United States will be required to provide clear, accessible pricing information online about the items and services they provide in two ways.{{Citation needed|date=January 2020}}
In California, a regulation known as the "Payers' Bill of Rights" (which is unique to the state) requires all hospitals to provide their chargemaster to the state, which then posts them online for the public.<ref name=oshpd /><ref>{{cite news|url=http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/report-surgery-prices-vary-wildly-at-california-hospitals.html |title=Report: Surgery Prices Vary Wildly at California Hospitals |first=Bob |last=Herman |work=Becker's Hospital Review |date=July 16, 2012 |accessdate=March 4, 2013|publisher=ASC Communications}}</ref>
The chargemaster procedure is generally only regulated in Maryland; author Peter Reid Kongstvedt notes in ''Essentials of Managed Care'', "Of particular importance, other than in Maryland, hospitals are generally free to charge whatever they want in their chargemaster."<ref name="kongstvedt" />
== Relationship to hospital price transparency regulations == A hospital chargemaster is a comprehensive list of billable services and items maintained by a hospital, typically reflecting gross or list prices rather than amounts paid by insurers or patients.<ref name=":0">{{Cite web |title=Health Affairs (Reinhardt, 2011) |url=https://www.healthaffairs.org/doi/10.1377/hlthaff.2011.0703}}</ref> Chargemaster prices are often substantially higher than negotiated rates and do not reliably represent actual transaction prices paid by insurers or patients.<ref>{{Cite web |title=Health Affairs (Reinhardt, 2011) |url=https://www.healthaffairs.org/doi/10.1377/hlthaff.2011.0703}}</ref>
Chargemasters historically served as the foundation of hospital billing systems and internal charge accounting.<ref>{{Cite web |title=American Hospital Association |url=https://www.aha.org/fact-sheets/2019-01-09-hospital-charge-description-master-cdm}}</ref> Under federal hospital price transparency regulations issued by the Centers for Medicare & Medicaid Services, hospitals are required to publicly disclose payer-specific negotiated rates and discounted cash prices in machine-readable files.<ref>{{Cite web |title=CMS – Hospital Price Transparency |url=https://www.cms.gov/hospital-price-transparency}}</ref>
The publication of chargemaster data alone does not satisfy federal hospital price transparency requirements.<ref>{{Cite web |title=CMS – Hospital Price Transparency FAQs |url=https://www.cms.gov/hospital-price-transparency/faqs}}</ref> CMS guidance distinguishes between chargemaster prices and negotiated rates, stating that negotiated rates must be disclosed for each payer and health plan to meet regulatory requirements.<ref>{{Cite web |title=CMS – Hospital Price Transparency Enforcement |url=https://www.cms.gov/hospital-price-transparency/enforcement}}</ref> As a result, chargemasters are generally considered administrative reference tools rather than consumer-relevant pricing disclosures under current federal transparency rules.<ref name=":0" />
Analyses of hospital transparency data have also found that negotiated rates and cash prices disclosed under the rule often diverge substantially from gross charges, reinforcing that chargemasters are a limited proxy for actual reimbursement or expected payment amounts.<ref>{{Cite web |url=[https://www.serifhealth.com/blog/analyzing-inpatient-hospital-pricing-using-price-transparency-data](https://www.serifhealth.com/blog/analyzing-inpatient-hospital-pricing-using-price-transparency-data) |title=Analyzing Inpatient Hospital Pricing Using Price Transparency Data |website=Serif Health |date=June 12, 2025}}</ref><ref>{{Cite web |url=[https://www.serifhealth.com/blog/historical-price-transparency-data-trends](https://www.serifhealth.com/blog/historical-price-transparency-data-trends) |title=Historical price transparency data trends |website=Serif Health |date=March 26, 2025}}</ref><ref>{{Cite web |url=[https://www.serifhealth.com/blog/why-discounts-arent-enough-how-employers-actually-move-the-needle-on-healthcare-costs](https://www.serifhealth.com/blog/why-discounts-arent-enough-how-employers-actually-move-the-needle-on-healthcare-costs) |title=Why "Discounts" Aren't Enough: How Employers Actually Move the Needle on Healthcare Costs |website=Serif Health |date=September 11, 2025}}</ref>
==Critical analysis== Chargemasters gained national attention in early 2013, when in short succession, there were two important publications made. First, there was a ''Time'' magazine cover story published February 20, 2013, titled "Bitter Pill: Why Medical Bills Are Killing Us",<ref name="brill">{{cite magazine |url=http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/print/ |archive-url=https://archive.today/20130412010113/http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/print/ |url-status=dead |archive-date=April 12, 2013 |title=Bitter Pill: Why Medical Bills Are Killing Us |first=Steven |last=Brill |authorlink=Steven Brill (journalist)|magazine=Time |publisher=Time Warner|date=February 20, 2013|accessdate=March 4, 2013}}</ref> in which reporter Steven Brill examined the overlooked role that chargemasters played in the American health care system's cost crisis, asserting that they routinely listed extremely high prices "devoid of any calculation related to cost", and were generally regarded as "fiction" in the healthcare industry, despite their significant role in setting prices for both insured and uninsured patients alike.<ref name="brill" /> Then, a couple months later, the Centers for Medicare and Medicaid Services published inpatient prices for hospitals across the country in a publicly available format.<ref>{{cite web |url=http://www.huffingtonpost.com/2013/05/08/hospital-prices-cost-differences_n_3232678.html |title=Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences |first1=Jeffrey |last1=Young |first2=Chris |last2=Kirkham |publisher=Huffington Post |date=2013-05-08 |accessdate=2013-06-24}}</ref>
"The 'full charges' reflected on hospital Charge Masters are unconscionable", wrote George A. Nation III in a 2005 piece for the ''Kentucky Law Journal''.<ref>{{cite journal |title=Obscene Contracts: The Doctrine of Unconscionability and Hospital Billing of the Uninsured |first=George A. |last=Nation III |journal=Kentucky Law Journal |year=2005 |page=101 |volume=94 |publisher=University of Kentucky College of Law}}</ref> Health care economist scholar Uwe Reinhardt noted in a 2006 article for ''Health Affairs'' that the approach to chargemasters by hospitals would have to be modified to become more transparent, in order to encourage a form of consumer-driven health care to help improve the system.<ref>{{cite journal|first=Uwe|last=Reinhardt|authorlink=Uwe Reinhardt|journal=Health Affairs|url=http://content.healthaffairs.org/content/25/1/57.short|doi=10.1377/hlthaff.25.1.57|pmid=16403745|date=January 2006|volume=25|issue=1|pages=57–69|title=The Pricing Of U.S. Hospital Services: Chaos Behind A Veil Of Secrecy|doi-access=free|url-access=subscription}}</ref> University of California, Berkeley professor of health economics James C. Robinson pointed out prior criticism of the chargemaster, "Much ink has been spilt bemoaning that incomprehensible foundation of hospital cost accounting and prices, the redoubtable chargemaster."<ref name="jamescrobinson" /> Robinson called for greater transparency as well as increased price standardization as steps to help remedy the situation.<ref name="jamescrobinson">{{cite journal|first=James C.|last=Robinson|url=http://bcht.berkeley.edu/docs/Price-Transparency-Begins-at-Home.pdf|title=Price Transparency Begins at Home|pages=25–28|volume=23|issue=3|journal=Frontiers of Health Services Management|publisher=American College of Healthcare Executives|year=2007|doi=10.1097/01974520-200701000-00004|pmid=17405389|s2cid=14263360|access-date=2013-03-05|archive-date=2013-05-21|archive-url=https://web.archive.org/web/20130521120537/http://bcht.berkeley.edu/docs/Price-Transparency-Begins-at-Home.pdf|url-status=dead}}</ref>
In a 2007 article for ''Health Affairs'', Gerard F. Anderson observed, "Without knowing what services they will use in advance, it is impossible for patients to comparison shop."<ref name="gfanderson">{{cite journal|journal=Health Affairs|first=Gerard F.|last=Anderson|title=From 'Soak The Rich' To 'Soak The Poor': Recent Trends In Hospital Pricing |doi=10.1377/hlthaff.26.3.780 |pmid=17485757|date=May 2007 |volume=26 |issue=3 |pages=780–789 |url=http://content.healthaffairs.org/content/26/3/780.short |publisher=Project HOPE: The People-to-People Health Foundation, Inc.|doi-access=free |url-access=subscription }}</ref> Anderson also noted the esoteric nature of the language on the chargemaster made it difficult for patients and anyone other than hospital administrators to understand.<ref name="gfanderson" /> Anderson emphasized the difficulty of patients' ability to interpret the chargemaster in a subsequent 2012 article: "Furthermore, most of the items on the charge master file are written in code so that only the hospital administrators and a few experts in the field can interpret their meanings."<ref>{{cite journal |first1=Gerard |last1=Anderson |last2=Chalkidou |first2=Kalipso |authorlink2=Kalipso Chalkidou |last3=Herring |first3=Bradley |title=High US Health-Care Spending and the Importance of Provider Payment Rates |date=September 2012 |journal=Forum for Health Economics & Policy |volume=15 |issue=3 |pages=1–22 |issn=1558-9544 |doi=10.1515/fhep-2012-0007|pmid=31419860 |s2cid=154853606 }}</ref>
==See also== {{Portal|Economics|Medicine|United States}} *Charity care *Dartmouth Atlas of Health Care *Explanation of benefits (insurance) *Healthcare Blue Book *Health care prices *Health insurance in the United States *Health insurance costs in the United States *J. Patrick Rooney *Medical debt *Underinsured
==References== {{reflist|30em}}
==Further reading== *{{cite magazine |url=http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/print/ |archive-url=https://archive.today/20130412010113/http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/print/ |url-status=dead |archive-date=April 12, 2013 |title=Bitter Pill: Why Medical Bills Are Killing Us |first=Steven |last=Brill |authorlink=Steven Brill (journalist) |magazine=Time |publisher=Time Warner |date=February 20, 2013 |accessdate=March 7, 2013}} *{{cite news |first=Steven |last=Brill |authorlink=Steven Brill (journalist) |title=Coming up with 'A Bitter Pill' |work="Stories I'd like to see" blog |publisher=Thomson Reuters |url=http://blogs.reuters.com/stories-id-like-to-see/2013/03/05/coming-up-with-a-bitter-pill/ |archive-url=https://web.archive.org/web/20130307134418/http://blogs.reuters.com/stories-id-like-to-see/2013/03/05/coming-up-with-a-bitter-pill/ |url-status=dead |archive-date=March 7, 2013 |date=March 5, 2013 |accessdate=March 25, 2013}} [https://www.cjr.org/behind_the_news/stories_id_like_to_see_coming.php?page=1 Alternate link], ''Columbia Journalism Review''.
==External links== {{wikiquote|Chargemaster}} {{wiktionary|chargemaster}} *[http://www.oshpd.ca.gov/Chargemaster/ Database of hospital chargemasters in California], Office of Statewide Health Planning and Development, State of California *[https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html Medicare Provider Charge Data], Centers for Medicare & Medicaid Services
Category:Healthcare in the United States Category:Health insurance in the United States Category:Health policy in the United States