Never experienced pain like this

[papsrus]

So they know if they bill for $50,000 they'll get $6,000.

Eh?

MG

Insurance companies and health-care providers (hospitals, doctors offices, clinics) typically have agreements where the health-care providers will accept a percentage of the total billed cost as full payment, basically. The insurance company pays this. (The patient usually owes a co-payment to the health-care provider as well).

Invoices typically will show a column with the total amount billed (say $1,000) followed by a column that shows the amount that the health-care provider has agreed to accept from the insurance company as full payment (say, $200) followed by a column that shows what the patient owes as a co-payment (say $40).

I think the general idea is that the insurance companies are providing a pool of clients, and hospitals and clinics agree to accept a percentage of the actual billed amount in exchange for access to that pool of clients. ... something along those lines.

This practice leads to health-care providers inflating the first number in order to get an acceptable amount in payment from the insurance companies.

Also, some clinics and doctors will not accept some insurance plans. So as a patient, you have to match your insurance with the list of doctors they provide, or you will pay higher out-of-network costs (higher deductibles, co-payments, etc.)

It's a wonderful system. Even better if you enjoy mounds of paperwork!

EDIT: btw, all this comes up for renegotiatiation each year. For instance, the company I work for negotiates with a variety of insurance providers each year to get what they deem to be the best deal (for them, not necessarily for their employees, although hopefully the two coincide).

As a result, beginning Jan. 1st I will have a new insurance carrier (my company is switching from Blue Cross to United Health). United Health may or may not include my current doctor on their list of in-network health-care providers. (I haven't been able to determine this yet.) If my current doctor is not in their network, I will either have to find a new doctor -- one who is in their network -- or pay higher out-of-network costs to remain with him.

You can imagine the complications all of this might present for someone who is actually seriously ill. Having to deal with a serious or long-term illness is stressful enough. Having to wade through all this insurance crap is enough to drive you over the edge.

Edited December 2, 2009 by papsrus