In addition to grocery store and building material costs, consumers – or in this case, patients – can add hospitals to the growing list of sectors facing price hikes. At the Iowa Board of Regents meeting June 11, University of Iowa Health Care received approval to increase chargemaster rates for its clinical enterprise by 6% […]
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In addition to grocery store and building material costs, consumers – or in this case, patients – can add hospitals to the growing list of sectors facing price hikes.
At the Iowa Board of Regents meeting June 11, University of Iowa Health Care received approval to increase chargemaster rates for its clinical enterprise by 6% for FY2026. Chargemaster rates are the hospital’s official list prices for every service, procedure, supply and medication.
“UI Health Care charges have some impact on prospective contractual rates set by payers,” board documents stated. “They also directly impact current reimbursement for payers who use percent of charge as part of their payment structure,” adding that charge rates can impact how the health plan or insurance program decides to pay for care overall, or how it pays in special cases.
According to board documents, the request for a rate increase is driven by a couple factors, one being a comparison of peer academic hospitals. The second factor is limits on charge increases in UI Health Care’s payer contracts, and many commercial payers cap annual facility charge increases at 6% or less.
“Given UI Health Care’s low charge levels, it would be reasonable to increase charges more than 6%. However, given the cap on charge increases in many of its contracts, it is most prudent to cap the increase proposal to 6%,” board documents stated.
“As always, we do a comprehensive analysis to inform the adjustments,” said Mark Henrichs, UI Health Care’s associate vice president for finance and chief financial officer, at the board’s meeting. “Our goal is always remaining below the 50th percentile nationally from a pricing perspective,” he continued, adding that the 6% price increase will help maintain the system below that rate.
“We always want to make sure we’re balancing that with any self-pay impact, so we continue our strong charity care commitments” which are based off the federal poverty limits, Mr. Henrichs said. The charity care program shields the medically indigent from being impacted by charge increases.
“(The charity care program) starts at 350%, basically discounted payments, and ultimately has a sliding scale that gets to a point where basically the patient pays zero depending on their ability to pay,” he continued.
“How much spread is there between academic medical centers on their charges?” asked regent David Barker, and Mr. Henrichs replied “quite a bit of spread.”
“So moving up six percent doesn’t change our percentile ranking very much, then,” Mr. Barker said.
The rates will be effective starting July 1.
