It has been common for hospitals to raise their chargemaster rates substantially each year in an effort to win higher reimbursement rates from health insurers. But the practice falls hard on uninsured patients, because most hospitals give no more than a 20-percent discount to the uninsured.
These gross prices are listed on spreadsheets called chargemasters, and are typically used as a starting point in negotiations over fees in much the same way the sticker price of a car is the initial bargaining point at an auto dealership. The chargemaster prices are typically negotiated downward to reasonable reimbursement rates for private insurers and public programs such as Medi-Cal and Medicare, according to the suit. Not so for uninsured patients of Sutter hospitals , who are billed the full sticker price, which can be 80 percent higher than the industry standard, according to the suit.