Becoming an Informed Health Care Consumer

Tennessee Hospital Charity Care

Charity Care Grows to Record Levels

Tennessee hospitals provided more than $1.9 Billion in uncompensated care in 2010, up from $765 million in 2001. The dramatic 147 percent growth reflects Tennessee’s hospitals commitment to serving the less fortunate.

Uncompensated care costs include charity care, medically indigent, bad debt and shortfall in TennCare reimbursement.

Hospitals are generally faced with competing objectives of balancing budgets, remaining competitive, complying with healthcare and regulatory standards, and continuing to offer needed services to the community. For that reason, hospital charges are usually set within the context of each hospital’s broader community.

As the place where the most complex care is provided for ill and injured patients and the one place mandated by law to provide care, it remains important that hospitals balance their responsibility to their larger communities.

Take responsibility – No one knows more about you than you do! Adopt healthy behaviors and visit your doctor regularly. Follow your doctor's instructions about life style issues such as diet and exercise. Take an active part in health care for you and your family.

Know your insurance plan – Learn about your health insurance plan or medical benefits before you need to use them. Each insurance plan differs in what it covers, its limits of coverage, and the rules that apply to the plan.

Know your hospital – Many factors come into play when you are trying to select a hospital. You may want a hospital close to home, one recommended by a family member, or one that you have been to before. Or your insurance plan may only cover care at certain hospitals. Whether you are choosing from among many hospitals or only a couple, this website can give you information about the median charge (half the patients were charged more than the median charge, and half the patients were charged less than the median charge) at Tennessee’s hospitals. Keep in mind that many factors affect a hospital's charges and utilization rates. Such factors include the availability of physicians and staff and the level of care or specialization of services offered.

Understanding charges – Keep in mind that the "charges" shown on this website are different from "cost," "reimbursement," "price," or "payment." Many factors will affect your costs for a hospital stay including whether you have insurance, the type of insurance, and the billing procedures at a given hospital. The amount collected by a hospital is almost always less than the charges billed. Three common examples are:

1. Government programs such as Medicare and Medicaid pay hospitals much less than billed charges. These payments are determined by the government agencies and hospitals have no ability to negotiate reimbursement rates.

2. Commercial insurers or other purchasers of health care services usually negotiate discounts with hospitals on behalf of the patients they represent.

3. Many hospitals typically have prompt payment discount policies and policies that allow low-income persons to receive reduced-charge or charity care.

Remember, if you have questions about specific health care needs and what the charges might be for services, ask your hospital.

Consumer Guide to Hospital Charges

The amount a hospital bills for a patient's care is known as the charge. This is not the same as the actual cost nor the amount paid for the care. This website lists the median charges billed by hospitals for their most common diagnostic-related groups or DRG.

The median charges for each DRG are derived from a standardized billing form, which lists the actual charges for each patient. The amount actually collected by a hospital (the amount paid) for each DRG is often less than the listed charge.

There are many reasons why charges may differ between hospitals. Generally, charges vary because no two patients are alike. Their conditions, reactions to medications or treatment, physician practices or preferences, or time of recovery will all impact the charge for care. Some of the more common reasons charges vary fall into the categories of patient variations and hospital variations. Also, see our Frequently Asked Questions (FAQ) section for an explanation of these terms.