Posted 11/1/2021 7:16 AM (GMT -7)
Mel, while many appear high, unwarranted and often get knocked down, they aren’t actually phony for several reasons, with two being primary.
First, it is well known that Medicare level reimbursements will not and can not sustain the present level of health care in the United States. That fact is well known and no one in the know disputes it. The commercial insurance, other third party payors and the patient must fill the gap created by Medicare/Medicaid, or the overall level of care and availability must be reduced or eliminated. So if a procedure actually costs $100 and Medicare only pays $50 then someone else has to pay $150. If not, then after a while of losing money, the procedure will no longer be provided to anyone and then everyone loses out.
Second, each provider negotiates and/or accepts payment limits from commercial insurers and other third party payors like unions, self-insured company plans, HMOs, etc. This varies greatly by area and combinations of different providers and insurers/unions/employer self insured plans, etc. the provider lists a price that is known to all and negotiates down from there. Whatever they first list is the most they can negotiate from, so they purposely pad the assumed price. By definition it must be padded about 35-50 due to the Medicare/Medicaid underpayment gap. Then they must pad the assumed expense even more to guard against unsuccessful negotiations or coercive effect by very large payors.
It is this first, highest charge that you see on the bill and EOB. That is what law and regulations require. Basically no one pays it. Even the self paying negotiate with the providers and many court cases have ruled that an uninsured can only be charged as much as the insurance companies have negotiated, not necessarily the top-line on the bill.
An exception to this would be practitioners that do not negotiate with insurers and do not directly participate in Medicare. They tell you the charge, you accept it or negotiate it, if possible, and then pay it. Then you independently claim against your insurance plan or Medicare and receive some reimbursement in many cases. You will remember the renowned PCa medical oncologist, Dr. Snuffy Meyers. Several men on the board used him before his retirement. He used this method. The growing number of concierge practices use this method as well by charging a set monthly “membership” charge that then provides certain visits and procedures. For some things within the membership the patient may receive a reimbursement. Of course for hospitalizations and other such costs outside the membership, the rules of provider and payor reimbursement are in place.
The best I can advise is simply don’t look at the numbers unless you have to stroke a check. That is the only real and meaningful number. Find other things, like last night’s Braves game, to fuel anger and depression. Works for me.