2016 Postmortem
Related: About this forumObamacare now requires hospitals to charge uninsured patients same rate as those with insurance
The new regulations were apparently issued by the IRS in April.
From an Ezra Klein wonk blog post this morning: Here's why hospitals set high prices
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/19/heres-why-hospitals-set-high-prices/
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JoePhilly
(27,787 posts)Squeeze the uninsured for as much as possible, and then write off the difference. Hope this puts a stop to that.
kiri
(789 posts)I am skeptical about this being an improvement for the uninsured. I have often told doctors, dentists, even hospitals that I have no insurance but I can pay by check or credit card. I have received up to a 50% discount, more usually 15-30%. The reason is not necessarily sympathy, but it saves them a lot of money and headache.
Submitting insurance forms, going to a "coding" company, having to re-do them after inevitable challenges, are extremely costly.
Obviously I have insurance for costs that may exceed $5000.
R Merm
(405 posts)My old insurance did not kick in until my out of pocket per incident reached $1,000.00 and my insurance company did not have any contracts with local providers. I too used to get "cash" discounts. I have switched to a company that does have local contracts, and while I still don't reach my $3,000.00 deductible I am paying the insurance companies contract rates and even with the "cash" discounts it is saving me a ton of Money. What ever rate you can negotiate for the cash payments it is still higher then what the insurance companies pay.
ca3799
(71 posts)"Bitter Pill" by Brill, published in "Time" magazine recently shows that most hospitals use a billing book called a "chargemaster" to negotiate rates, and that the "chargemaster" rates have little, if any, relationship to the actual cost of the procedure or item being billed.
So if your MRI chargemaster cost is $2000.00 and they give it to you for $1000.00, you feel like you got a good deal. Until you learn the value of the service is more like $250.00 and if you were insured your insurance would have been billed maybe $500.00 leaving you a co-pay of $100.00. You wind up paying half the value of the service as an insured and an 800% markup as a self pay.
Medicare has the pricing closest to actual value- including the cost of equipment, lifetime depreciation, usage and maintenance and includes the cost of operating it, too.
The article also reveals that the uninsured often pay much higher rates than the insured and that hospitals uses "chargemaster" rates to declare charitable care, even though they don't often actually charge those rates to almost anyone (except self-pays) thus inflating the value of the charity they provide. And then many charitable hospitals beg you to fundraise for them when they are positively rolling in the dough.
Sadly, healthcare billing is the US is a scam on everyone involved.
JoePhilly
(27,787 posts)The discounted price you get is still more than what they charge the insurance companies. In many cases its more than double. So even a 50% discount doesn't get you down to the same price the insured pay. And they write off the other 50% as a charitable act. So its in their interest to up the price.
My mother worked in medical billing for years and saw this all the time.
Also, the big money is made for surgery above $5k. They'll charge the uninsured $10k then negotiate that down to maybe $5-6k. Meanwhile, the price for the insured is $2-3k.
So they make extra on the uninsured and then also get a tax write off on the difference.
progree
(10,891 posts)BlueStreak
(8,377 posts)But none of the insurance plans actually pay face value.
The only case I have heard of that actually sound plausible is a local outfit that does blood tests. If you pay cash, they take 50% off. They probably figure they save a lot of hassle not having to fine paperwork with the insurance companies. But even so, that 50% is probably pretty close to the net amount they would receive from insurance plans.
dotymed
(5,610 posts)the uninsured.
If the wording is "bill the uninsured the same rate that you would an insured person." Because while the hospital, Dr., etc.. "bills" my insurance company an outrageous amount, "they" have negotiated large discounts that reduces the "bill" by about 50%.
So, my charge is actually a fraction of the original "bill." If the language said that health care providers could only charge the patient, the same amount that post negotiated insurance bills are, then IMO, the uninsured patient would benefit.
Walk away
(9,494 posts)Without x-rays and blood tests the uninsured can't be diagnosed or treated. I had over $2000 worth of blood tests last month but Blue Cross was only charged $280 and no co-pay.
I don't know anything, but I'm skeptical when I read someone got something costing X for Y.
Could it be that the real cost for those blood tests was more like $500, with you having to take the clinic/hospital's word that it cost two fat ones...?
Did your clinic/hospital use the Charge Master? http://en.wikipedia.org/wiki/Chargemaster
JayhawkSD
(3,163 posts)It is simply a list of prices, and they bear no relationship to costs. It is simply an arbitrary list of prices, and it varies hugely from one hospital to the next, even when they are just a few blocks apart.
catrose
(5,059 posts)I had $114 of lab work (billed through insurance), but the insurance company made a mistake (gosh!) and wasn't paying because they claimed the doctor wasn't on their List (he was). After a year, the lab charged me at uninsured rates: over $500.
A year ago, I went into to the emergency room with chest pains. I was having trouble finding my insurance card; they whisked me back to the treatment rooms anyway. I stayed overnight while they did test after test, and the bill without insurance was over $30,000. When I sent them my insurance info, the bill dropped below $5000.
annabanana
(52,791 posts)The amount that insured patients are billed includes both the amount the insurance company pays out, and the co-pay that actually comes out of the patient's pocket. This amount, while lower than that billed to the uninsured, is still an enormous chunk out of the average family's budget.
Ms. Toad
(33,992 posts)Hospitals are not required to reduce their rates to people without insurance (which foregoing the co-pay or deductible would require).
The first step insurance companies take when they receive a bill from a provider is to reduce the amount charged to the contract rate. That is the amount the article is referring to - the amount the provider has agreed to receive from all sources.
Of the contract rate, the insurance company then sorts out what part of the amount the provider has agreed to accept as payment in full will be paid by the insurance company and what part will be paid by the person receiving care.
Uninsured individuals are billed anywhere from 5% (doctor's visits) to 1000% (labwork) more than people with insurance (based on the bills we have received in the last year during which I have been paying attention to the reduction). Uninsured patients have to pay all of that inflated bill - not just the inflated co-pay portion.
annabanana
(52,791 posts)Ms. Toad
(33,992 posts)It is typically a discounted rate, which providers expect to make up for by charging people without insurance more...but yes, it is the real bill (and now what they will also have to charge people without insurance).
rhett o rick
(55,981 posts)to compensate them for the difference between the billed amount and the contract amount? In other words do they get to deduct it as a loss?
Ms. Toad
(33,992 posts)It works the same way as when a store has a sale (or gives a preferred customer discount like some of the wholesale clubs). They just have less income from those customers.
rhett o rick
(55,981 posts)"Charity care is incredibly important to facilities like Bayonne Hospital Center, which needs to demonstrate that it provides a high level of “community benefit” in order to maintain its status as a nonprofit hospital. The higher prices that a hospital charges, the bigger amount of charity care its providing."
Ms. Toad
(33,992 posts)They also have to recover from people without insurance who have the means to pay for the discounts they provide to insurers. Charity care generally only applies to people below a certain income level - and they do get paid in full by people with means without insurance (bankruptcies, aside).
rhett o rick
(55,981 posts)rhett o rick
(55,981 posts)"Among other changes, the new regulations requires hospitals to charge uninsured patients a rate that not more than the “amounts generally billed” to patients with insurance coverage." They never discussed billing the uninsured more than that billed to the insured. Not the billing rate anyway. It's not clear whether or not the Obamacare change is good or bad.
Ms. Toad
(33,992 posts)There are lots of times I read articles about the law (generally) which bear little resemblance to reality. I suspect "bill" is being used generically to mean the amount they expect to be paid. As a practical matter, hospitals bill for procedures at whatever book rate they have - the same for everyone. The insurance company writes it down to the contract rate. So the rate they expect to be paid for insured patients is lower than what is literally billed. I believe that is what is intended to be matched.
If I get a chance I'll find the provision in the law. If it uses the word "bill" it likely also defines it to mean something different from what the providers send out that we typically think of as a bill.
rhett o rick
(55,981 posts)
GeorgeGist
(25,311 posts)Which I had for <$500 paid by BCBS. No copayment.
mr.ed
(18 posts)Maybe the hospital should be named Bonanno, after the crime family, which evidently runs the place.
ramapo
(4,587 posts)I wasn't aware of this provision. It helps address one of the sick inequities of our health care business.
HDCowboy
(44 posts)Do you want them to charge the uninsured "MORE" than the rate charged to those with insurance???
Ms. Toad
(33,992 posts)From the bills I have tracked, anywhere from 5% (for doctors visits) to 1000% (for labwork). Because they currently discount the rates so heavily to insured clients they have to charge the uninsured (who don't have the power of numbers to demand a better deal) more to cover their costs.
HDCowboy
(44 posts)I can get out cheaper paying cash if I so desire! Maybe I've got lucky found a decent Doc!
tridim
(45,358 posts)
uponit7771
(90,301 posts)
karynnj
(59,498 posts)Like others, I have seen the insurance company statements that show the market price, then their adjusted rate in addition to showing what they paid and what you owe. It was always stunning that the write down between the market price and their rate was often more than half - meaning more of the benefit of having insurance was NOT that they paid some of it, but that they could force a negotiated rate.
It always seemed so unfair that those who did not have insurance - in most cases because it was too expensive - had to pay more than the sum of what the insurance company and I paid. It always seemed unconscionable - even knowing that hospitals sometimes wrote down costs for poorer people without insurance.
Overseas
(12,121 posts)If we de-privatize military services, we can save a lot.
http://www.contractormisconduct.org/
JayhawkSD
(3,163 posts)It will not affect what hospitals actually bill; I'm pretty sure the IRS does not have to authority to regulate that.
It will affect what portion of the billing the hospital can report for tax purposes; as losses when it is unpaid, for instance. That kind of thing the IRS does all the time. If you pay $x rent, for instance, the IRS may rule that only $z is deductible from your taxes.
I do not believe that anyone's hospital bill is going to be smaller as a result of the IRS.
Jim Lane
(11,175 posts)In your example of rent payments, the taxpayer is actually out-of-pocket for the amount paid, so there's a legitimate basis for a deduction (although, as you say, it may turn out that not all is deductible).
There's no such out-of-pocket expense if a hospital bills a patient a million dollars for a test and then settles the bill for $50. The hospital hasn't actually incurred a loss of $999,950. The legitimate deductions would be for the wages paid to the lab technicians, the costs of various supplies used, etc., which wouldn't be affected by the amount billed to or paid by the patient.
JayhawkSD
(3,163 posts)If the bill is not paid at all, the amount billed is deductible because hospitals, like almost all large businesses, use the accrual method for accounting. Almost all unpaid bills are to cash customers, since insurance companies pay their bills, so it very much to the hospital's advantage to bill higher charges to cash customers.
Jim Lane
(11,175 posts)If the hospital bills $1,000,000 for a test, and gets paid only $50, and uses accrual accounting, then, yes, when the hospital writes off the rest of the bill as uncollectible, it would recognize a loss of $999,950, which would be deductible from gross income.
BUT if it uses accrual accounting, then, when it sent the bill, it would have recognized income of $1,000,000. The inflated bill and the inflated deduction for nonpayment would net out.
If the hospital actually collects $50 for this particular test, and has no hope of collecting any more, then the transaction increases its taxable income by $50, regardless of the amount initially billed and regardless of whether it uses cash accounting or accrual accounting.
In general, a business can't generate a phony loss to reduce its tax liability simply by declaring itself to be owed some fanciful amount, and then despairing of collecting it. The scams to avoid paying taxes have to be at least a little more sophisticated than that.
Swede Atlanta
(3,596 posts)has insurance or not. It makes no sense other than to demonstrate our health-care system, if you want to call it that, is rigged.
The only reason why services rendered to a patient with insurance should be any higher than someone who doesn't have insurance would be the cost of filing the insurance claim and the delay in receiving payment. Those problems are easily surmountable by standardizing insurance processes and mandating a payment period for unchallenged claims.
Three years ago my father who has since passed away was treated at a hospital where he had been previously admitted. The hospital had both his Medicare and his supplemental insurance information in their system. The hospital came to the conclusion he was uninsured (despite the fact he was in his 80s!!! They never billed him for the services rendered because any mail that was sent to him at his Alzheimer's facility was always forwarded to me because I was managing all his financial and legal matters. So, having made no attempts themselves to bill for the services they employed the services of a collection agency for services that were billed at less than $200.00!
Somehow the collection agency found me and sent me the collection notice that included of course the outstanding amount plus a collection service fee. I contacted them to find out what this was for because of course the collection notice contained no identity of the service provider. They told me they couldn't tell me that without a copy of my father's financial and health care POAs. I told them I didn't know who they were, who they were representing and would not be providing any confidential documents or information without some way of legitimizing their claim. I asked if they could confirm this was related to some form of health care provider. They wouldn't provide that.
I wrote them a letter advising them to contact the service provider to resolve the matter because the service provider had never issued a single bill for the services. Further I told them I considered the matter closed as between us and to not contact me again.
About 4 months later I receive a bill from the hospital that was mailed after I had had this encounter with the collection agency. The bill was sent to his address of record that was given at the time the services were rendered, i.e. the Alzheimer's facility. They forwarded the bill to me as they did with any mail sent to him. I contacted the hospital and told them I am more than happy to clear up the matter but that they needed to pull this back from collections because this was the first bill I had received from them for these services.
They reluctantly agreed. Then I gave them his Medicare and supplemental insurance information. They admitted no one at the hospital had looked at their records to see this information from when he had been admitted there previously. They said they would issue a new invoice that would reflect the insurance filings. When I got the new invoice, the fees for services rendered were now $250.00 and not $200.00 I called the hospital and they told me that they charge more if you have insurance. So Medicare and his supplemental insurance actually pay more than someone without insurance (whether that uninsured person ever pays or not)!!!
Our portion of the $250.00 ended up being less than $5.00 when I finally issued them a check.
But what a circus.....
IrishAyes
(6,151 posts)I had a neighbor here in RedNeckLand who moved to Witchita, KS and incurred a non-health-related bill she never paid. But she'd written me down as a credit reference w/o my knowledge or consent, so when the collection agency couldn't find her, they started after me. I don't like those guys or their methods, so I always bite back hard but it still took months to get them off my back. At one point I told them since they seemed to think that anyone could pass off debts to anyone else of their choice, I was going to max out my credit card and send the bill to them to pay whether they agreed to it or not. "Well, if you do that, you're going to jail for fraud, bitch!" the man said. I said maybe we could be cell mates, because he'd be right there too.
Then another time I simply BROWSED the online selections for Book of the Month Club, then sent them an email to ask a question. Soon after I received a huge bill even though they never sent the books I never ordered. Eventually their unmet demands for payment prompted calls from another collection agency and I had another messy round with them. Neither the Book of the Month Club nor the collection agency has a credit card or social for me, but I guess my address is easy enough to find with an email trail. Six months after I thought I'd finally rid myself of them, here comes another dun letter insisting I call them immediately. I won't, because it may reset their legal privileges of some kind. But if the phone calls resume, I'm going to raise bloody hell like they've never seen before.
I know this thread is about medical insurance and costs, and I apologize if I've erred by wandering too far afield, but dammit those collection agencies figure in too, and they are the worst.
BlueStreak
(8,377 posts)because the uninsured will have to go bankrupt whether they mark it up 200% or 1000% So why not really paint the town?
Of course, the person who has to go bankrupt does get hurt, but those people don't have lobbyists, besides, they are just "deadbeats."
Sunlei
(22,651 posts)plus the hospital gets billions of our Federal money to cover some of their unpaid, billed 'costs.'
vkkv
(3,384 posts)Even a friggin' DENTIST that I used to go to charged me more beacuse I DID NOT have dental insurance. I paid them in CASH and the still wanted to overcharge me...
My new dentist gives me a 10% break for paying in cash.
OmahaBlueDog
(10,000 posts)I've seen my insurance bills over the years. Their bulk buying power leads to payments of often half of the posted initial charge.
Crow73
(257 posts)I went for a time without insurance a few years back. I only paid $75 per visit to my Doctor. My insurance is billed $150...
I don't know if this is common, but it is a bit odd.
DAVEDCHICAGO
(26 posts)These are the list prices. Most uninsured gets billed these I believe?
Most of the items are arbitrary and hard to decipher what you would incur...
But Blistex listed for $17.68 will show you the amount Of markup.
http://www.dameronhospital.org/documents/Dameron_Hospital_2012_Chargemaster.pdf
Manifestor_of_Light
(21,046 posts)8 days in ICU, no surgery.
The hospital had better make sure that I live to be 158 years old.
It will take me 100 years to pay it off at the rate I'm paying.