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A Study of Hospital Charge Setting Practices

December 2005

Medicare Payment Advisory Commission (MedPAC)

The Medicare Payment Advisory Commission has expressed concerns about the accuracy and fairness of the current Medicare hospital inpatient and outpatient prospective payment system. Payment rates for these systems are based, to varying degrees, on hospital charges. In order to better understand hospital charge setting practices and the nature of hospital mark-ups across service lines, MedPAC engaged The Lewin Group to conduct a nationwide study of hospital charge practices. This report reviews the charge practices of a purposive sample of hospitals and hospital systems around the U.S.
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