Medicare charge-receipt data: results for South Dakota

The 2013 release of 2011 financial information by the Centers for Medicare and Medicaid Services (CMS) caused concern because some hospitals had charges that appeared to be exorbitantly high compared to reimbursement rates.

Charges and receipts for South Dakota were compared to national data. The study was restricted to nine discharge codes likely to be seen by an adult hospitalist service.

South Dakota hospitals had a lower charge-to-receipt ratio than the national average (p < 0.01). The average ratio in South Dakota was 2.74 compared to 3.75 nationally. South Dakota charged 29 percent less for these discharge codes and received 3 percent lower reimbursement than the national average.

The relatively low charge-to-receipt ratio and low charges in South Dakota are encouraging. Unfortunately, the only South Dakotans likely to be asked to pay full charges are the uninsured, who thus face bills that are much higher than insurance companies pay for the insured population. This leaves uninsured patients and hospitals with trying to negotiate discounts or waivers on an individual basis, which is an inefficient and problematic approach for both parties.