Hospital "Estimate" vs. Insurance Payout? WTF?

[Robert Coats]

Why does a Hospital's estimate of work vastly exceed the negotiated amount they will actually get paid by an insurance company?

I'm having a CT study next week, and got a letter from the hospital stating it would cost $6,300.00, but my insurance would pay $460.00, and I'd owe....wait for it...nothing.

Why does a hospital have such pie-in-the-sky estimates, knowing they've contracted with insurance companies for < 8%?

At first guess, I though that non-insured, or patients with non-contracted insurance would be expected to pay that full amount, or at least a lot more than 10%. Can't believe there are patients out there with zero insurance (not even federal Medicaide/Medicare) that could afford this.

I'm sure the insurance co. is quick to say, "We are nationwide, but you are local hospital, so you'll accept what we will offer" and "We've studied the actual costs of a CT exam, top-to-bottom, and yeah, it's only costing you about $500. Take it or leave it. We'll deal with our angry customers when you tell them you don't accept them."

Glad I'll be dead in < 25 years. Feel sorry for my descendants, at least while I'm still alive.

[Tobra]

If you do not bill far more than the allowed amount, they will start to think the allowed amount is enough for you, and they pay a percentage of that.

For example, say Medicare's allowed amount is $100 for a service. They pay 80% of the allowed amount, or $80. You might think, if they are going to pay $80, just bill them that. If you do, you get $64, 80%

As a provider, you are better off billing a big number, accepting the smaller one that is a percentage of what they allow, and let the dance continue.

[rockfan4]

I have my wife's insurance, except they deny every claim submitted for me with a "Do you have other insurance?" BS. No. I have her insurance. Pay it.

Went in for a standard wellness check. Can't even call it a physical anymore, since the doc barely touches you. Part of it was a Lipid panel and Glucose.

First round of "we don't insure him" resulted in a bill of $106.00 for the two tests.
Second round went a little better, with - we'll pay for the $24.00 Glucose test, but only pay you $15.23, and he's only going to pay you $53.99 for your $82 Lipid panel. So I got it down to half. That's fine until you search the hospital's web site, and you find a form that says they'll do both for $25.00. Admittedly it is for another hospital in this health system about 80 miles away, but wouldn't you think they'd charge the same or about the same in all their hospitals? Not $25 in this one and $106 in the other one?

To be honest, this insurance BS and weird billing is a large part of why I don't like going to the doctor.

[Alan A]

Have regular blood work pulled by my endo.
Where you have them send it matters a lot - quest is a $40 copay, the affiliated hospital is $580 out of pocket.

[911_Dude]

What gets me is dental insurance. A regular cleaning and xrays was supposed to be covered. Before the appointment they even showed me a print out with all the charges and what insurance will pay and what I will owe, which was $0.00. I agree, get the work done, and a few weeks later I get a bill for $75 because insurance shorted them.

How is that right to jack the price after the amount was agreed upon? Where is the disconnect in the amount they show insurance will pay prior to service and then after? Seems like someone is ripping me off and Im not happy.

[Pazuzu]

Originally Posted by Arizona_928

That works and all until one pays out of pocket w/o insurance... Which is just robbery at that point....
.

If you have something done and need to pay cash, then you ask for a CASH PRICE beforehand, and agree to it before anything is done. The cash price won't be as low as the insurance payout, but it should be a fraction of the quote fee.

If not, go elsewhere.

If you don't ASK for the discount, it won't magically happen.

[Rick Lee]

Mrs. Lee has a cousin who came to the US to have an anchor baby, but also because Chinese kids born with other than PRC citizenship don't count toward their one child per family thing. This is an industry in California. We went to the hospital in San Gabriel where she was giving birth and they had a price list on the wall like a menu at a concession stand. All visiting Chinese pay cash. It was quite a sight to behold.

[JackDidley]

I am paying some med bills now. I have had 12 visits to physical therapy. I pay 20%. They bill insurance $195, accept $36. My 20% is $50. How is that right ??

[john70t]

I'd imaging it also involves taxes as well. If they need to lower their bracket they can claim the unpaid portion as a loss.

[Jeff Hail]

Its no different from Direct Repair Programs (DRP's) that Insurance companies have with the Collision Repair Facilities.

Contracts and pricing menu. Agreed labor rates which are less than prevailing rates, parts discounts, material limits. Nullifying or reducing customary charges. The list goes on.

Insurance companies squeeze any industry they pay claims out to. Its not all bad because it does keep things competitive.

As a side note what does anyone think they are getting of quality when a Doctor gets paid $150 after adjustments? You are lucky to get 30 minutes now for an office visit and thats not quality time. Its also a reason many Doctors have gone into specialty versus General Practice. Specialists can charge more.

[Jeff Hail]

Originally Posted by 911_Dude

What gets me is dental insurance. A regular cleaning and xrays was supposed to be covered. Before the appointment they even showed me a print out with all the charges and what insurance will pay and what I will owe, which was $0.00. I agree, get the work done, and a few weeks later I get a bill for $75 because insurance shorted them.

How is that right to jack the price after the amount was agreed upon? Where is the disconnect in the amount they show insurance will pay prior to service and then after? Seems like someone is ripping me off and Im not happy.

"Everything is covered" is pretty common in a medical office just as "we will bill your insurance company" is. In the real world the provider will bill the carrier. What gets paid is determined by limits of the policy, policy language, deductible as well as any exclusions. "Everything is covered" less your deductible is the norm.

Medical billing errors occurs on both the provider side and carrier. I find myself verifying CPT codes regularly for accuracy.

If the provider has an agreement (contract) with the carrier a cafeteria menu of "services" exists with a pricing structure. Some insurance carriers pay from the invoice if it is reasonable and customary (common in dental).

If you believe your carrier may have made an error contact them and have them explain the bill breakdown and why it did not meet your expectation.

[Noah930]

Originally Posted by john70t

I'd imaging it also involves taxes as well. If they need to lower their bracket they can claim the unpaid portion as a loss.

Not true. Whatever remains in accounts receivable is just your loss. No tax benefit.

[Noah930]

Originally Posted by Jeff Hail

Specialists can charge more.

Also not true. There is no difference in billing based upon specialty. It's the samr set of rules for everyone. So if a mom insists her kid gets sewn up by a plastic surgeon in the ER, that plastic surgeon doesn't get to charge any more than that ER doc. Well, the plastic surgeon can charge more, but they won't get paid any differently by any insurance.

However, in general procedures pay better than office visits, so doctors who do procedures for a living tend to get paid better than doctors who see patients in an office

[Noah930]

In medicine, all insurance related billing is done via codes: codes published by Medicare, and copied by virtually every other insurance company out there.

There are alphanumeric codes for diagnoses, level/complexity of an interaction/visit, and procedures. To get paid for something, a provider has to provide code(s) for the diagnosis and treatment, as well as proof (medical charting) of the service provided. So depending on the nature of the service provided, you'll either get paid by the diagnosis, the level of complexity of the visit (rated on a scale of 1-5), OR on the procedure that was performed. There are some modifiers which can alter the bill slightly, but nowhere is your declared specialty, level of experience, or background training taken into account in medical billing.

[Noah930]

However, there is an exception to the above. Hospitals are allowed to charge more than non-hospitals. A procedure or service offered by a hospital has a different fee schedule than when performed in an out-patient setting. So a surgery or CT scan done at a hospital can be billed for at a higher rate than if it was done at an out-patient surgery center or out-patient radiology center.

[Jeff Hail]

Thank you Dr. Yung. Always appreciate your input.