[Noah930]

That's a surprisingly complicated question to answer.

Traditionally doctors were in solo private practice. After completing internship/residency training, a doctor would hand a shingle and start seeing patients. In the traditional model of fee-for-service, the doctor would bill the patient and the patient would pay the bill.

More recently health insurance companies have popped up. If a doctor wants access to the patients/customers within a pool covered by a particular insurance company, the doctor signs up to be a recognized provider under that health insurance plan. The doctor is then allowed the see the patient and bill the insurance company for the treatment. The fees are agreed upon in advance (based upon a contract). The doctor agrees to accept that fee schedule. Usually/almost always the fee schedule is loosely based upon Medicare reimbursement rates; for example, the contract may specify that the insurance company will reimburse 125% of the Medicare fee schedule. Whether the insurance is Blue Cross or Medicare, the concept is fairly similar. If a doctor is not "within network" then the doctor is not bound by that fee schedule and can bill whatever is usual and customary for him/her; the insurance company will pay whatever they feel like and the patient is technically responsible for the rest (obviously how much each party covers is the big part of the debate). The benefit for the doctor is an available pool of potential customers provided by the insurance company. The detriment is that the agreed upon fee schedule is going to be lower paying than the usual and customary billing practice. Hence, patients usually don't want to be stuck with a big bill ("hey, isn't that what I'm paying insurance for?)" and will often not want to stray from the medical provider network of their insurance plan. But with insured patients (within network) the doctor will bill the insurance company. Part of this includes providing proof (via medical records/charting) that the service billed for was actually performed; a doctor can't just bill for a procedure or diagnosis--he/she has to demonstrate via medical records that the procedure/diagnosis exists. If a patient is out-of-network, then the doctor will often bill the patient directly and let the patient sort it out with his/her insurer.

Either way, there is a difference between what's billed, and what's collected. You can bill a million dollars for something, but that doesn't mean you're going to get paid a million dollars for it. So in traditional private practice, a doctor earns a living via his/her collections. Whether that's money collected from a patient directly, or from the patient's insurance company. Increasingly people "pay" via insurance. There are statistically few people who pay out of their own pockets. Technically those patients are referred to as "self pay" or "cash pay" patients. That's also the euphemism for those patients (i.e. typically in the ER or if you're called for an in-hospital consult) who wind up not paying you anything for your efforts.

And obviously, like in any other business, a doctor doesn't just take home whatever's collected. There's a business to run--an office to cover. So for every dollar collected, perhaps 45-75% may go to office overhead. If a doctor collects a dollar, he/she may really take home 25-55 cents. This is the traditional "eat what you kill" model. A doctor's income depends on what's collected. And what a lot of people (and doctors) don't realize is that just because you're busy doesn't mean you're making money.