Trauma activation fees vary significantly by payer type, study finds

Providing round-the-clock trauma care can cost as much as $6 million to $10 million a year for hospitals with level-one trauma centers, which are capable of providing total care for every aspect of injury, from prevention through rehabilitation. Trauma activation fees were created in 2002 to allow hospitals to recuperate some of these readiness costs, which previously had never been covered by charges to individual patients.

Because there currently is no standard fee schedule or uniform approach, calculating trauma activation fees is left to the discretion of each individual trauma center. The 2021 Hospital Price Transparency Rule mandated that hospitals disclose their service prices. Health care services in the United States largely are seen as market goods that can be compared before purchasing, yet this principle is not applicable in emergency settings.

Trauma activation fees are billed to patients using various revenue codes for trauma response levels, theoretically reflecting patients’ trauma severity. In a study reported in JAMA Network, researchers analyzed 3,093 trauma activation fees from 761 hospitals in 49 states. For level-one responses, the median prices were:

• List prices, which represent unregulated sticker prices for each service, applicable to all patients, including uninsured or out-of-network patients, $6,607.
• Cash prices, which are hospitals’ expected fee without billing insurance, $2,663.
• Negotiated prices, $3,431.

“Within the same trauma level, along with list price variation identified in previous studies, we found wide trauma activation fee variations in cash and negotiated prices on both hospital and state levels,” the report said. “The findings illustrate substantial, and often irrational, variations within and across trauma activation levels, suggesting that price variations cannot be explained by trauma severity alone.”

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Because of the study methodology, researchers noted that the findings are conservative and do not reflect an even a wider range of price variations.

“Nonetheless, trauma response levels are coded by a standard criterion, yet prices vary up to 16 times between hospitals,” the report concluded. “The unexpected and pressing nature of trauma means patients are sent to the closest appropriate hospital and unable to compare prices as they do with nonemergency and shoppable medical services. Such pricing variations seem to disproportionately affect uninsured, most financially vulnerable patients. Interventions are needed to address appropriate health care pricing.”