Froedtert Hospital recently announced it will implement a rate adjustment that will increase gross patient revenue by 4.9 percent beginning July 1 to compensate for below-cost reimbursement from government programs and the increased cost of providing care.
That’s compared to its last increase of 5 percent, which was implemented on July 1, 2016.
Hospitals are required to report rate increases to the state and community if the increase is greater than the consumer price index, which is 2.5 percent.
The average price increase at Wisconsin hospitals in 2017 is 4.07 percent as of May 18, according to the Wisconsin Hospital Association. In 2016, the average price increase was 3.73.
Health care systems typically raise rates between 2 and 10 percent at the beginning of the system’s fiscal year. Earlier this year, Aurora Health Care and Children’s Hospital of Wisconsin raised their rates 4.5 percent and 4 percent, respectively.
Meanwhile, Ascension, which acquired Wheaton Franciscan Healthcare in 2016, recently announced a rate adjustment that will increase gross patient revenue by 3 percent at Wheaton Franciscan Healthcare-St. Francis in Milwaukee, Wheaton Franciscan Healthcare-St. Joseph in Milwaukee, Elmbrook Memorial in Brookfield and Midwest Orthopedic Specialty Hospital in Franklin. It also announced a rate increase of 3.3 percent at Wheaton Franciscan Healthcare-Franklin.
In recent public notices announcing the rate increase, both Froedtert and Ascension said it’s necessary to increase prices to keep pace with the increasing costs of providing care with below-cost reimbursement rates from government programs and other payers.
Rate increases are only on charges — the amount a hospital bills for a patient’s care — rather than a price increase on the actual care. The amount collected by a hospital for each service is almost always less than the amount billed.
The new prices typically have little impact on the average patient with commercial insurance because all major health care providers have contracts with insurance companies that use the hospital rates as a starting point for negotiations.
Rates don’t apply to Medicare or Medicaid patients. Both programs pay hospitals a set rate based on the patient’s diagnosis and the procedure.
