Medicare, You Can Do Better (Or Why You Need A Translator For This Post)

I wrote to Medicare a while back, asking for a price.  I know nothing is simple in the world of health care costs, but I just needed one number, that's all. One number that Medicare uses, I assume, to calculate payments to doctors and hospitals all the time.
Here's what I wanted to know: how much does Medicare pay a particular hospital in Boston for a colonoscopy (it was for a story I wrote about searching for the best colonoscopy in our medical Mecca).

The first response I got, at a time when we're supposed to have more price transparency, was ridiculous.  If I can figure this out, I should be awarded an honorary masters in something, don't you think?

For the inpatient hospital side:

If you want to calculate a hospital specific DRG payment for a specific fiscal year, look at that year’s IPPS Impact file to get the hospital’s wage index.

Then you can look at Table 5 for the FY 2009 Final Rule to get the relative weights for the MS-DRGs you are interested in. Finally, you can determine the FY 2009 labor related share and non-labor related share rates from Table 1A in the FY 2009 Final Rule.

These files and tables can be found here: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Acute-Inpatient-Files-for-Download-Items/CMS1247872.html

Then the hospital specific DRG payment can be calculated as follows: (wage index x labor related share + non-labor related share) x DRG relative weight.

For the outpatient side:

Medicare Part B data by procedure code for specific years are posted: http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/NonIdentifiableDataFiles/PartBNationalSummaryDataFile.html Data are presented by 5-digit code so you would need to know the code for CT scan and MRI. Code range categories are identified in the readme file which is included in the zipped file.

A colonoscopy for the inpatient side does not affect the MS-DRG assignment. You will only be able to narrow it down by looking at the procedure codes. Below are the two most common reported.

ICD-9-CM procedure code 45.23, Colonoscopy

ICD-9-CM procedure code 45.25, Closed [endoscopic] biopsy of large intestine - this code includes colonoscopy with biopsy

So I write back to Medicare.  Really,

I ask, is this what I have to do to find out how much you pay a hospital for a basic test?  Well, says the Medicare media contact, that's the calculation if you have the test in a hospital.  Since many colonoscopies are done in outpatient clinics, you could also follow these instructions:

Addendum A for January 2013
http://www.cms.gov/apps/ama/license.asp?file=/hospitaloutpatientpps/downloads/January-2013-Web-Addendum-A.zip

APC 0158 looks like it would be the correct APC
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The quarterly Addenda A and B that are used for payment are at

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html

If you click that first link, and accept the terms of use, you'll see a spreadsheet with several thousand procedures and prices.

AND, the answer to my question is (drum roll please)...$611.77.

I'm going to keep that second link handy (not the table, because it will be updated periodically). Medicare prices are often the basis for negotiations between insurers and hospitals or physician groups. So if you want to know if a certain hospital is charging a lot more than what's considered, reasonable, you'll want to take a look at the Medicare price, if you can find it.

Medicare does a lot of cool things. The Blue Button (and the new iBlueButton app) has been helpful several times in monitoring my mom and my sister's health care record. So why is it so hard to calculate what a hospitals is paid? Come on Medicare, you can do better than this.