Quote:
Originally Posted by Mattyk72
No actually it's called fee scheduling and it's 100% legal.
There is an agreed upon rate for medical services, medical equipment, etc.
Insurance companies never pay the full amount, I guess you can say it's a bulk discount rate.
Or you could look at it from the other side and say medical providers are overcharging those without insurance. Don't always be so quick to blame the big bad insurance companies.
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See here's the problem...
Hospitals get paid by basically 3 sources:
- Federal government pays decently for Medicare patients. We basically break even on Medicare patients.
- State governments pay terribly for Medicaid patients. We lose our shirts on Medicaid patients.
- Commercial insurance companies pay very well, on the whole. But the bigger the insurance company, the lower their payments. If I'm an insurance company who covers five million people in the Washington DC area, hospitals NEED to contract with me, or I'll tell my customers that they can't go to XYZ hospital because they're not part of the network. If a customer goes to an out-of-network hospital, they'll have to pay some out of pocket costs. But if they go to an in-network hospital, they pay nothing. No brainer, right? No patient would go to the out-of-network hospital. So if I'm a hospital, I have no choice but to reach an agreement with the big insurance company. I can't just do without access to 5 million lives. So as the hospital, I'm forced to take it up the rear and accept low payment rates from the big insurance company. Now, a little insurance company comes along, with say 100,000 customers, the hospital is licking its' chops. The hospital has all the leverage, they say we don't care about your 100,000 customers, either pay us a big rate, or find another hospital to deal with. And all the hospitals treat the little insurance company that way, and they have no choice but to pay through the nose.
So... since hospitals are breaking even on Medicare, and losing money on Medicaid, and barely making anything off the big insurance companies, they've got no choice but to rape the little insurance companies and overcharge uninsured patients. It's either that, or the hospital goes out of business. It's a crying shame, but it's reality.
People like to blame the hospitals, but really, show me a hospital that makes money. They only exist in the plush suburbs where median household income is 100,000 or higher. Blaming the hospitals isn't the answer, if they didn't catch as catch can, they'd all go out of business. And then nobody in the city could find a hospital when they needed it.
It's not the providers, and it's not the insurers. It's the system.