Adding to the various burdens that COVID-19 has placed on world economies and the population in general, RevCycleIntelligence reports that, when delivered outside of a patient’s network, COVID-19 hospitalizations can cost hundreds of thousands of dollars depending on where a patient is a treated.
California was the most expensive state for out-of-network COVID-19 hospitalizations, with an average charge value of $111,213. Median charge value for an out-of-network COVID-19 hospitalization was $84,006.
Allowed values for in-network COVID-19 hospitalizations were also high in the Golden State. California landed in the highest bracket (between $30,001 and $35,000) with a median allowed value of $34,396 and an average allowed value of $42,674.
States with the highest median total treatment costs for out-of-network COVID-19 hospitalizations also included:
In these states, median charge value for an out-of-network COVID-19 hospitalization exceeds $80,000. At the same time, a good portion of of these states (Nevada, Arizona, and Alaska) also have some of the highest in-network allowed charges for non-complex COVID-19 hospitalizations.
The New FAIR Health Report
This data comes from FAIR Health’s “COVID-19 Medical and Hospitalization Costs by State” tool. It reveals average and median costs for both in-network and out-of-network for three different COVID-19 treatment pathways:
- complex hospitalization
- non-complex hospitalizations,
- outpatient treatment.
FAIR Health released the tool “as a public service to provide stakeholders with valuable insights into pandemic-related healthcare spending,” president Robin Gelburd said in a press release earlier this week.
“We hope that the tool inspires further research and informs policy making and is otherwise put to practical use,” Gelburd stated.
COVID-19 hospitalizations are having a significant impact on healthcare spending. A recent Kaiser Family Foundation (KFF) analysis found that approximately 287,000 hospitalizations could have been prevented in June, July, and August of this year, and those inpatient stays cost the healthcare system almost $6 billion during the three-month period.
Also noted in the report and reported by RevCycleIntelligence:
- While charge values for out-of-network inpatient stays for the virus were highest in California, patients in Maryland incurred average charges of just $31,339—the lowest average in the country.
- In-network COVID-19 hospitalizations were also cheaper in Maryland, with an average allowed value of $12,531 and a median allow value of $10,979.
- Only eight other states—Michigan, Arkansas, Louisiana, Alabama, Kentucky, West Virginia, Virginia, and Delaware—had median allowed values of less than $15,001.
- Meanwhile, about a dozen states had median allowed values of over $30,000. The rest of the states varied between $15,001 and $30,000.
RevCycleIntelligence notes that healthcare price variation is in the spotlight largely due to new hospital price transparency requirements from CMS.
The federal agency requires hospitals to publish their chargemasters, as well as other pricing information, including payer-specific rates. The requirements are meant to empower patients to shop around for care.
The price variation spotlights a topic that the The No Surprises Act looks to directly address: Price Transparency. While the COVID-19 pandemic is an extreme example of the price variations that occur across the country, it's not uncommon that patients are paying different prices for routine exams and surgeries at different providers/hospitals. With providers and payers needing to comply with the new regulations, it's more important than ever for them to integrate AI and machine learning technologies that will streamline finance operations and revenue cycle to ensure that the billing process is in line with patient expectations.