About 8 years ago I was having severe back pain, bad enough that I decided to get an epidural injection. I had good health insurance but for employment reasons I didn't want it on my insurance record. (Long story). Anyway I found a spinal treatment center and they quoted me around $900 to just pay for the procedure myself, without putting it through insurance. It worked like a charm and I felt almost 100% better. Three weeks later I get a bill in the mail for over $4,000. Turns out the billing department fucked up. They hadn't put it through my insurance, but they mistakenly charged me the "insurance price" instead of the "self-pay" amount, and they revised it back to the original $900. WTF? Obviously $900 was the correct price as I'm sure they wouldn't perform the procedure at a huge financial loss, but if they're billing it through insurance they charge four times as much? The system is totally messed up.
huh? medical practices offer "self pay amounts" that are less than the insured amounts? i never heard of such a thing.
i'm assuming the 4 grand was the co-pay amount of say 20%. so in reality without coverage wouldn't that mean you should have been billed 20 grand?
if i could "self pay" then why even bother to have health insurance? kinda confused and frankly ignorant about this topic.
Most medical offices do offer discount for self-pays.
Your fee schedule of $4000 is. what you use to open negotiations with insurance companies. Insurance Payor rates usually end up around 40%-50% of your list. This includes the compensation for your professional biller or billing company. Individual billers typically earn $70,000-$90,000 annually. Billing companies typically charge 10% of your receipts. Direct self-pay cuts out the billers, is received immediately (versus anywhere from 3-12 months for insurance payers), has no danger of being denied, no need to be tracked, etc, Yes, ethical medical offices always offer a discount for self-pay. We actually offer flat rates for office visits and knock 20% off for procedures.
Insurance billing vs. insurance payments is so fucked up that Massachusetts law had to be amended to not only allow the admission of hospital bills as proof of value of service rendered by the Plaintiff, but to allow the Defendant to discover and have admitted into evidence the amount actually paid.
===> "Yes, ethical medical offices always offer a discount for self-pay. "
I have yet to find this rare "ethical medical office" creature. I know what I pay out of pocket and I see what my insurance company pays on my statements at both a number of PCPs and urgent care facilities. Not once has my out-of-pocket cost been lower than what the insurance company pays.
The cost of the biller, while not completely irrelevant, is only marginally the point. The bigger point is negotiating power. If 15% of an office's revenue comes from a single insurance carrier, the odds are real good that they are going to have much greater bargaining power in negotiating per visit rates than a guy walking off the street.
It has become even worse since Obamacare. As many medical practices have had their rates squeezed by insurance companies trying to control their premiums, some of them medical offices I deal with have tried to compensate by jacking up their cash rates.
No, Rick, everything you wrote is completely wrong. You have no understanding of how that all works. However, I am not going to waste my time explaining it all to you again. The only point I am going to explain for you is your last paragraph. The first half was the only correct part of your entire post.
Obamacare has made healthcare less affordable, and insurance companies are trying to control rates by decreasing payments. No one is using cash rates to try to offset the decreased payments by payers. They are offering, and performing, more procedures. Endoscopies, electromyographies, different imaging orders, expanded service visits. These are all ways that medical offices are attempting to increase revenue beyond the standard $100-$200 rate per office visit. This is also why many payers have tightened the proof of medical necessity while approving these orders.
If you would like proof of how important these procedures are to keeping healthcare providers in the black, look at all the hospitals that are laying off staff to stave off bankruptcy after elective procedures were cancelled during the lockdown.
I do not know what happened in other states, but FL Gov. Desantis issued an EO barring elective procedures (not immediately necessary for life and health). The purpose was to lessen the demand on medical PPE used by those directly treating patients with COVID-19. This, combined with patients who opted to stay home instead of seeing a physician, had quickly led to many offices laying off staff by the dozens. Healthcare accessibility was a huge problem before the pandemic, and it is even worse now. We have snowbird patients who went back north for the summer who have been unable to schedule with a specialist in that state sooner than their planned return to FL for the winter.
Dude, my insurance company pays my kids pediatrician and the local urgent care center about $70 per visit. I pay $100 and $130, respectively, on a cash basis and they won't budge on those rates. I have similar examples with prescription drugs, though GoodRX and Walmart have leveled the playing field a bit there.
So spout these theories all you want, but I've been seeing these dynamics on the ground for years with multiple PCPs and pharmacies. Now maybe hospitals work differently, IDK, and hopefully I'll never find out.
Rick the idea of lower self pay prices isn't that the patient pays less than the insurance company gets billed. It means that if a patient doen't have insurance, or chooses not to have the insurance billed, the patient will pay less than the total of what they and their insurance would have paid if they processed it through the insurance.
Whodey, that's apples and bananas. Whether or not it is more cost effective for me to self-pay or use insurance has nothing to do with the value of a doctor visit. Yes that might be part of my calculus, but that's not a point of sale matter. The simple fact is that if I pay cash the doctor's office charges me 30-40% more than they charge Blue Cross for the exact same service, which for some reason seemed to confuse gam.
Medical fees are influenced by Federal laws, State laws, and contract laws. There can be multiple reimbursement schedules depending on who is paying. Fictitious example: Medicare pays $100 for an x-ray of the forearm. BC pays say $85. UH may pay say $83. Medicaid pays say $62. Now if the imaging center sets their fees at the Medicare $100, there is no driving force for Medicare to ever increase their reimbursement. So, the center charges $300 for a forearm x-ray. Plus, say the injury is the result of an auto accident in a state without a legislated auto injury fee schedule, the center will actually receive the $300.
Cash or time of service discounts are limited by Federal and State laws. Some States would limit the discount to a 20% reduction of the full $300 fee (or $240). Other States would allow reduction down to the Medicare reimbursement level of $100. Nowhere is it legal to discount to less than the Medicare fee schedule. So, in the OP, $4000 is the price for the injection and the amount they bill to all insurance companies. $900 is the amount they charge for a cash procedure because that is equal to or greater than the reimbursement they would get from Medicare and all their commercial insurance contracts.
I was in the hospital last year. My insurance was billed $250k and ended up actually paying like $39k, of which I had to pay $5k. Insurance is fucking awesome
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What are you even doing here if you don't have a spare $1.1 million lying around.
i'm assuming the 4 grand was the co-pay amount of say 20%. so in reality without coverage wouldn't that mean you should have been billed 20 grand?
if i could "self pay" then why even bother to have health insurance? kinda confused and frankly ignorant about this topic.
Your fee schedule of $4000 is. what you use to open negotiations with insurance companies. Insurance Payor rates usually end up around 40%-50% of your list. This includes the compensation for your professional biller or billing company. Individual billers typically earn $70,000-$90,000 annually. Billing companies typically charge 10% of your receipts. Direct self-pay cuts out the billers, is received immediately (versus anywhere from 3-12 months for insurance payers), has no danger of being denied, no need to be tracked, etc, Yes, ethical medical offices always offer a discount for self-pay. We actually offer flat rates for office visits and knock 20% off for procedures.
I have yet to find this rare "ethical medical office" creature. I know what I pay out of pocket and I see what my insurance company pays on my statements at both a number of PCPs and urgent care facilities. Not once has my out-of-pocket cost been lower than what the insurance company pays.
The cost of the biller, while not completely irrelevant, is only marginally the point. The bigger point is negotiating power. If 15% of an office's revenue comes from a single insurance carrier, the odds are real good that they are going to have much greater bargaining power in negotiating per visit rates than a guy walking off the street.
It has become even worse since Obamacare. As many medical practices have had their rates squeezed by insurance companies trying to control their premiums, some of them medical offices I deal with have tried to compensate by jacking up their cash rates.
Obamacare has made healthcare less affordable, and insurance companies are trying to control rates by decreasing payments. No one is using cash rates to try to offset the decreased payments by payers. They are offering, and performing, more procedures. Endoscopies, electromyographies, different imaging orders, expanded service visits. These are all ways that medical offices are attempting to increase revenue beyond the standard $100-$200 rate per office visit. This is also why many payers have tightened the proof of medical necessity while approving these orders.
I do not know what happened in other states, but FL Gov. Desantis issued an EO barring elective procedures (not immediately necessary for life and health). The purpose was to lessen the demand on medical PPE used by those directly treating patients with COVID-19. This, combined with patients who opted to stay home instead of seeing a physician, had quickly led to many offices laying off staff by the dozens. Healthcare accessibility was a huge problem before the pandemic, and it is even worse now. We have snowbird patients who went back north for the summer who have been unable to schedule with a specialist in that state sooner than their planned return to FL for the winter.
So spout these theories all you want, but I've been seeing these dynamics on the ground for years with multiple PCPs and pharmacies. Now maybe hospitals work differently, IDK, and hopefully I'll never find out.
Cash or time of service discounts are limited by Federal and State laws. Some States would limit the discount to a 20% reduction of the full $300 fee (or $240). Other States would allow reduction down to the Medicare reimbursement level of $100. Nowhere is it legal to discount to less than the Medicare fee schedule. So, in the OP, $4000 is the price for the injection and the amount they bill to all insurance companies. $900 is the amount they charge for a cash procedure because that is equal to or greater than the reimbursement they would get from Medicare and all their commercial insurance contracts.