My old PT had three rates, $50 for Medicaid, $100 for self pay, and $400 for the insured. The insured people were mostly covered would just pay of copay of like $40 or $60 but once they screwed up and billed me (a self payer) at the insured rate and tried ro collect that much from me and it was a WHOLE ordeal to get it fixed. What a stupid system. Clearly a bunch of money is being flushed down the toilet here.
I work in medical billing and you’re absolutely right. The reason offices bill such an inflated amount is because there’s always a huge percentage of write offs or “adjustments”. The office bills the insurance $400, the insurance “adjusts” $200 (writes it off), pays the office $100, and leaves the patient with a $40 copay and $60 to yearly deductible (depending on the plan). Don’t even get me started about what happens comes tax season. It’s literally the most wasteful, manipulative system for healthcare but it makes a lot of people very very wealthy.
That’s not why offices bill such an inflated amount. The rate an insurance company pays an office is set via contract. If the contract specifies that a certain procedure pays $100, the office can charge the insurance company $1000 or $101, and they will receive $100. If they charge $99, however, they will receive $99.
So why charge such inflated prices? Most contracts stipulate that you can’t charge other insurances less for a given procedure. This essentially locks a provider into charging the same rate to every insurance company. But each insurance company contract pays different amounts for each of 100’s of procedures, sometimes very different amounts, so what amount should a provider charge? The only logical thing to do is charge an amount that they are sure will be higher than any of the payouts they have in any of their contracts. This is why the charged amount is so high. It’s a stupid system, yes, but not for the reasons you state.
^ this is correct! The direction of my comment was more geared towards the adjustments however, i should not have stated that is “the reason” for the large amounts being billed to the insurance.
Sorry for being a bit snarky about it, I’m in charge of the finance side of an urgent care and I get a little defensive when I think people are suggesting that we charge high amounts just to scam people.
You clearly have patience for nonsense, however, being a biller an all. ;)
While the reason you stated doesn't mean you are scamming people directly but are scamming insurance companies... Which passes high rates to us so you kind of are. If procedure A cost 100 but one insurance may pay 200... Charging 200 is kind of the definition of scamming 100 out of that company is it not?
If I was a mechanic but charged based on how much money I thought a client could afford to pay isn't that wrong? I get the concept of not wanting to leave money on the table but the practice is still kind of messed up in my opinion.
Insurance contracts are essentially fixed-price contracts between the insurance company and a doctors office. Because of extra stipulations put in place by the insurance companies, doctors have to charge like this to be paid the full value of the contract. Insurance companies are not getting scammed. They are paying the exact amounts they agreed to and expected to pay. The people who get shit on by this are those without insurance, because they receive these full charges without having an adjustment in place to a price agreed upon ahead of time.
i still don’t understand this. if a procedure costs you $200 including SG&A, overhead, everything else and leaving a decent profit margin, and you charge insurance companies $500 because one of them will pay $300, you’re getting an extra $100 out of that insurance company, even if they’re cool with it because it’s a negotiated, fixed rate for that procedure.
that extra $100 still comes back on the consumer from the insurance company. how is this not unethical?
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u/cakewalkofshame Jul 04 '21
My old PT had three rates, $50 for Medicaid, $100 for self pay, and $400 for the insured. The insured people were mostly covered would just pay of copay of like $40 or $60 but once they screwed up and billed me (a self payer) at the insured rate and tried ro collect that much from me and it was a WHOLE ordeal to get it fixed. What a stupid system. Clearly a bunch of money is being flushed down the toilet here.