Agreed, there are some locations that are better or worse than others. I am on a healthcare billing listserv where they talk about these challenges around the country.
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Can someone explain why medical invoices (outlined on EOBâs or MSNâs) usually indicate a cost that is much higher than the negotiated amount? This seems to be true for all insurance summaries including Medicare.
Making up numbers as an example: Cost of treatment = $1000. Insurance Negotiated Max = $200. Your portion varies depending on plan and coverage, but never the full $1000. For traditional Medicare, patient responsibility is 20% of $200, either paid by patient or any applicable Supplemental insurance.
The difference between the cost of treatment and the negotiated amount is usually very large. Is the intent to charge the full amount to those not covered by insurance plans (although this can usually be negotiated)? Or, is it considered a âlossâ for tax purposes? I can understand that negotiated amounts differ depending on Insurance companies, but why such a large difference? Do some insurance companies pay the full amount?
I doubt it. They pay the agreed upon amount for a serviceâŠand no more. I think Medicare pays less for visits, for example.
In other words, there is no real âcostâ for any procedure. Itâs anything the doctor or hospital want to charge.
Back in the day, before many insurers based their allowables on what Medicare was allowing, the standard rates in an area were based on what was reasonable and customary (R&C) for providers to be charging in that area. Once mangled care came into play (and no that is not a typo- we in healthcare refer to it as MANGLED care!), insurance companies were negotiating discounted rates with providers and facilities. But the negotiated rates had been based on the R&C rates. So if, for instance, the average charge for a procedure was $200, then that is what the providers should charge (whether they write off the âlossâ depends on the kind of bookkeeping they do) even if the insurance allowable is only $100. If they only charged the $100 allowable, then that would affect/lower what the R&C is in their area. Does that make sense? So bottom line, the providers charge what they charge, and the discounted ânegotiated rateâ is based on their contractual agreement with an insurance company. It can vary from insurer to insurer. And a patient with no insurance will be charged the full $200 (though often that is negotiable too).
In 2020 the "hospital price transparency ruleâ was finalized. Hospitals are supposed to make standard charges public.
hospital-price-transparency-frequently-asked-questions.pdf (cms.gov)
Anti-trust laws prohibit providers from discussing /comparing their fees as it is seen as price-fixing.
Iâm going through this now, trying to figure out how much a radiation treatment (series) will cost. The insurer told me I need to pay 20%. I asked 20% of WHAT. No one can tell me. I asked how much it would cost if I just walked in without any insurance. Canât tell me. Doctorâs office says I donât pay 20% but pay a co-pay of $30 per treatment, even if the specialist (doctor) isnât involved and even if the $30 is more than 20% would be. So who is right, the doctorâs office or the insurance company? I guess Iâll find out. Oh, and my plan says I pay $175 for a radiologist, but no one knows what that is (although âStephenâsâ best guess is that would be for an MRI or CatScan or something like that, but of course Stephen doesnât actually do the billing, just works in that group for this doctor. They just donât know and canât tell me, but do want me to have a nice day.
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Can you clarify if you have a copay or co-insurance? 20% will be 20% of the allowed amount. So if the allowed amount for each radiation treatment (assuming there arenât additional charges for supplies, etc) is, say, $200, you would owe $40, once your deductible is met. If you have a $30 copay, then that is what you would pay for each treatment (again once the deductible is met).
Probably because list price is set high as a starting point for negotiations between the provider and insurance companies.
Some providers will give significant discounts off list price to self-pay patients, but these are not announced publicly anywhere.
No, but some cash-pay patients may.
I have seen instances where the insurance company actually allowed all, or almost all of a charge (its not common, but it does happen). But they wonât pay more than the R&C for that area (which is why doctors should not charge the negotiated/discounted rate, as mentioned above, but charge their standard rate).
Do you have an out of pocket maximum?
I certainly understand the issue because itâs so opaque.
For us, we figure we will meet our out of pocket maximum and go from there.
Itâs not a good way but the only way we can with medical expenses that max out every year.
The official term for the reasonable & customary charges is UCR (usual, customary and reasonable). Back in the old days when many people had indemnity health plans, if you had an 80/20 plan, insurance paid 80% of UCR and the patient paid 20%. Nowadays with all the insurers negotiating and discounting with providers and facilities it is often extremely difficult to figure out what oneâs out of pocket cost for each procedure will be.
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This seems to be what THEY canât clarify. My understanding is that I have a copay, but the insurance company assistance line said 20% (I think thatâs wrong).
Itâs not really a deductible to be met first. I have a $4000 max and after that I pay nothing, but I pay $30 copay (or $40 for some things like mental health), and after I reach $4000 I donât pay the copay. But I donât pay the first $4000, just copays (or maybe the 20%). For some things I pay more (like a $175 for âradiationâ, $120 for an ER visit, $250 for x number of days in a hospital, $3xx for surgery).
I just wanted to know how much something would cost if I had no insurance. Canât tell me, and I think thatâs wrong. They should have to have a list price, or a rack rate like a hotel has.
Is it possible some procedures are subject to a copay and some to a co-insurance on your plan? Because yes, what you are describing is a copay per visit, until you have met your OOP max. But is it possible that part of the charges that might be charged are a co-insurance ? You are right, copays are just that, but if you also have a portion that is subject to deductible, it could get confusing (sounds like it has!!)
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Ugh. I can totally see that. A year or so ago I went to hours and lots of angst trying to figure out if my Colonoscopy doctor was in-network or not. Should be easy right? No. The office sent me a letter saying it might not be, which was weird since H used them as well as tons of people on my plan at work and itâs always been in-network. I call and nobody can figure it out. Not the doctorâs office, not the insurance. I took it to the insurerâs high level office dedicated to just our company. I literally had two people from that office call me within 30 minutes - one said yes, one said no. Round and round we went. Finally, it was deemed to be in-network.
So yes⊠I can completely see why something like this could trip up an insurance company/doctorâs officeâŠ
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And the gastro doc can be in network but the anesthesia doc or the facility itâs performed in could be OON. Its nuts.
Several years ago we had an issue with hearing aids. DHâs company provides a nice benefit that pays a certain amount to cover towards the cost of hearing aids every 3 years. Well, they got processed incorrectly, and it took a year and a half (literally) to get it fixed. The insurance company kept screwing it up or claiming they processed it correctly (they had not, I know how to read the EOBs), the employer then made us use a 3rd party company that was supposed to get it resolved (they were useless, despite my sending them spreadsheets showing them not only where the error was, but that due to the error we had actually paid MORE than our out of pocket maximum for that year). The HR/benefits person finally let me speak to a higher level supervisor at the insurance company and it got resolved⊠Finally. And then⊠last year, it happened again! After several months of a lower level âadvocateâ at the insurance company wasting time and claiming heâd never seen these errors before (hahaha), we finally had conference calls with HR, benefits, the insurer supervisors, etc, to get it fixed.
I am convinced the insurance company assumes that people either are unfamiliar with their benefits or their EOBs and will give up and pay the bill (many do). But with hearing aids it can be thousands of dollars. So again, this time we got HR/Benefits involved after âonlyâ 4-5 mos of misprocessed claims. It finally got fixed⊠but then⊠the insurance company sent a recoupment letter!!! Fortunately I still had everyoneâs email addresses and was able to get help to get that looked into and corrected (it was erroneous and âan error on their part- so sorry for your inconvenienceâ) and that still took a few months and after a few threatening letters.
Few people will have the knowledge (I happened to be a provider for that insurance company) or the persistence (I knew where they made the $$$ expensive error and was determined to get it fixed) or the opportunity to get Benefits/HR involved (if you ever have to, go to Benefits, not HR, unless, as in our case, it was one and the same). It gives me PTSD just typing about it!!
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Colorado now has a law against âsurprise billingâ and the hospital canât have labs and anesthesiologist suddenly out of network. That has helped a lot, but I still spend a lot of time ASKING if this is an extra visit (âIâll just call X Doc in for a consultâŠâ and then I get billed for a second appt, second âclinic or hospital feeâ and a simple consult ended up costing $2700).
Years ago I was sent to the hospital for emergency surgery and they told me to go through the ER as they werenât busy and could start the IVs, etc. Of course I got billed for the ER and that started a series of claims and my fighting those claims because it was for their convenience, not mine (or my need for ER services).
My husband had kidney stones a few years ago, so every year he goes in for a checkup. They do a very detailed lab workup on his urine. First we got the bill from the lab - $694.45. The company said to wait to pay until we heard from Medicare. The Medicare EOB shows that they wonât pay anything for it, but it also shows, âMaximum You May Be Billedâ as zero. How can that be?