Providers billed Medicare 480 times what it actually paid for a single lidocaine injection in 2023. That's not a rounding error or a data anomaly. It's a window into how American hospital chargemasters work, and the numbers get stranger from there.

The lidocaine HCl injection (J2001) carried a charge-to-payment ratio of 480.15 in 2023, with an average submitted charge of $10.05 against an average Medicare payment of $0.02. For Medicare patients, the insurer absorbs the gap. For the uninsured, that chargemaster price is the starting point for a bill.

The Top of the Markup Table

The procedures with the most extreme charge-to-payment ratios in 2023 are almost entirely injectable drugs, most of them cheap generics where Medicare's reimbursement rate has compressed to near zero while chargemaster prices have not followed.

Lidocaine's ratio has been extreme for at least a decade and barely moved. Albuterol's ratio, by contrast, grew by 113.76 points between 2013 and 2023, from 191.08 to 304.84. That's a drug administered through durable medical equipment to patients with respiratory conditions, often elderly and on fixed incomes. The gap between what providers charge and what Medicare pays has more than doubled in ten years.

Heparin sodium lock flush (J1642) tells a different story: its ratio was a relatively modest 9.48 in 2013 and reached 73.09 by 2023, a change of 63.61 ratio points across 501,630 total services. This is a routine saline-adjacent flush used to maintain IV line patency. The chargemaster price didn't need to move much to create a dramatic ratio when Medicare's payment is $0.02 per unit.

Volume Makes It Worse

A 480x markup on a $0.02 payment is almost abstract. The numbers become more concrete when you look at high-volume codes where the same dynamic plays out millions of times.

Fosaprepitant (J1453), an antiemetic used in chemotherapy settings, had a charge-to-payment ratio of 35.45 in 2023 across 12,028,306 total services. Palonosetron (J2469) ran a ratio of 71.38 across 2,654,841 services, with an average charge of $58.20 against a payment of $0.82. Ondansetron (J2405) hit 71.13 across 1,638,385 services, with an average charge of $5.32 against a payment of $0.07.

These are antiemetics given routinely to cancer patients. The aggregate gap between submitted charges and actual Medicare payments across those millions of services represents the scale of chargemaster inflation embedded in the system. For cost benchmarking and price transparency reporting, using submitted charges as a proxy for price produces numbers that are structurally disconnected from what anyone actually pays, except the uninsured.

Geography Compounds the Problem

The national ratios are striking. The state-level numbers are harder to explain.

In 2013, Nevada providers billed lidocaine (J2001) at a charge-to-payment ratio of 1,337.1, with a weighted average charge of $19.88 against a weighted average payment of $0.01 across 6,782 services. The national average for the same code that year was 489.19. Illinois recorded the single highest ratio in the geographic data: 3,186.4 for high osmolar contrast material (Q9958), with a weighted average charge of $235 against a payment of $0.07.

These aren't different procedures or different payers. They're the same HCPCS code, the same Medicare program, and ratios that vary by a factor of six or more depending on where the patient happened to receive care. The uninsured patient in Nevada facing a lidocaine charge in 2013 was looking at a starting price nearly three times higher than the national average for the same drug.

Whether that geographic disparity has narrowed or persisted into 2023 is the question the data raises but doesn't yet answer. Given that the national lidocaine ratio moved only 9 points over a decade, there's little structural reason to assume the state-level extremes resolved themselves.