COVID-19 Hospitalizations Can Cost Over $100K, If Out of Network

October 21, 2021 - When delivered outside of a patient’s network, COVID-19 hospitalizations can cost hundreds of thousands of dollars depending on where a patient is a treated.

California was the most expensive state for out-of-network COVID-19 hospitalizations, with an average charge value of $111,213. Median charge value for an out-of-network COVID-19 hospitalization was $84,006.

Allowed values for in-network COVID-19 hospitalizations were also high in the Golden State. California landed in the highest bracket (between $30,001 and $35,000) with a median allowed value of $34,396 and an average allowed value of $42,674.

States with the highest median total treatment costs for out-of-network COVID-19 hospitalizations also included Alaska, Arizona, Nevada, and Utah. In these states, median charge value for an out-of-network COVID-19 hospitalization exceeds $80,000. Many of these states—Nevada, Arizona, and Alaska—also have some of the highest in-network allowed charges for non-complex COVID-19 hospitalizations.

The data is from FAIR Health’s “COVID-19 Medical and Hospitalization Costs by State” tool, which shows average and median costs for both in-network and out-of-network for three different COVID-19 treatment pathways: complex hospitalization, non-complex hospitalizations, and outpatient treatment.

FAIR Health released the tool “as a public service to provide stakeholders with valuable insights into pandemic-related healthcare spending,” president Robin Gelburd said in a press release earlier this week.

“We hope that the tool inspires further research and informs policy making and is otherwise put to practical use,” Gelburd stated.

COVID-19 hospitalizations are having a significant impact on healthcare spending. A recent Kaiser Family Foundation (KFF) analysis found that approximately 287,000 hospitalizations could have been prevented in June, July, and August of this year, and those inpatient stays cost the healthcare system almost $6 billion during the three-month period.

That number could be higher though, researchers pointed out. Hospital prices vary widely for services and that applies to COVID-19 hospitalizations, they argued.

FAIR Health’s latest tool is a testament to that, underscoring the significant variation in charges for COVID-19 hospitalizations and outpatient treatment. The tool leverages FAIR Health’s repository of private healthcare claims.

While charge values for out-of-network inpatient stays for the virus were highest in California, patients in Maryland incurred average charges of just $31,339—the lowest average in the country. Median charge values in Maryland are $27,663, data from the time of this article’s publication showed.

In-network COVID-19 hospitalizations were also cheaper in Maryland, with an average allowed value of $12,531 and a median allow value of $10,979.

Only eight other states—Michigan, Arkansas, Louisiana, Alabama, Kentucky, West Virginia, Virginia, and Delaware—had median allowed values of less than $15,001. Meanwhile, about a dozen states had median allowed values of over $30,000. The rest of the states varied between $15,001 and $30,000.

Costs for COVID-19 outpatient treatment were a little more stable, although both charge values for out-of-network care and allow values for in-network care still varied. Median charge values ranged from $1,500 to $4,000, with Nevada and Alaska having the highest costs, and allowed values ranged from $0 to $1,600. Nevada was the only state with a median allowed value over $1,400, according to the tool.

Healthcare price variation is in the spotlight thanks to new hospital price transparency requirements from CMS. The federal agency requires hospitals to publish their chargemasters, as well as other pricing information, including payer-specific rates. The requirements are meant to empower patients to shop around for care.