Some US hospitals' mark up exceeds 1,000 percent

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Some 50 hospitals in the United States charge the uninsured and out-of-network patients 10 times what's allowed by Medicare, reports a new public health study.

The study, led by Gerard F. Anderson of the Johns Hopkins Bloomberg School of Public Health, and Ge Bai of Washington & Lee University was based on a review of 2012 Medicare costs reports.

"There is no justification for these outrageous rates but no one tells hospitals they can't charge them," Anderson said in a release.

"For the most part, there is no regulation of hospital rates and there are no market forces that force hospitals to lower their rates. They charge these prices simply because they can."

"For-profit hospitals appear to be better players in this price-gouging game," says Bai, an assistant professor of accounting at Washington & Lee University. "They represent only 30 percent of hospitals in the U.S., but account for 98 percent of the 50 hospitals with highest markups."

Those with insurance or seeking in-network care typically pay lower fees negotiated by their insurers.

"Thirty million uninsured Americans are likely to be charged the full rate, as are patients receiving out-of-network care and those receiving workers' compensation or auto insurance benefits," the researchers wrote.

"As a result, uninsured patients, who are often the most vulnerable, face exceptionally high medical bills, often leading to personal bankruptcy, damaged credit scores or the avoidance of needed medical services."

Only Maryland and West Virginia set rates for what hospitals can charge, the researchers said. Federal law does not regulate the hospital rates and most hospitals don't share how much they charge for services.

"This system has the effect of charging the highest prices to the most vulnerable patients and those with the least market power," Anderson said. "The result is a market failure."