You hit the nail on the head. Let the patient be involved. But like I said, if the hospital will accept a lessor amount from the insurance company it should accept a lessor amount from the cash paying patient.
It has also been my experience to pay as small a deposit as possible up front. They are more than likely to accept less money after the procedure is finished. One of the reasons is they’re getting paid just as much as the insurance company and getting it a lot faster.
It’s been my experience they’ll take about 40% of the bill as paid in full in a one time cash payment, if you can afford it. Write on the check PAID IN FULL. I discounted a bill about 80% and sent a check with PAID IN FULL on the memo. Two days later I got a call saying they couldn’t accept that amount but they would accept 40% but would need a new check. I told her I’d be there in about an hour with a check and she could give me my old check back.
And that’s another thing that pisses me off. It it’s going to take an insurance company 6 months to pay them 40% they should allow cash patients 6 months to pay 40%.
I wonder where you could get your hands on a pay list of the insurance amounts providers will accept for each procedure.
The Usual and Customary or Reasonable (UCR) fee is defined as the charge for health care that is consistent with the average rate or charge for identical or similar services in a certain geographical area. To determine the UCR fee for a specific medical procedure or service in a given geographic area, insurers often analyze statistics from a national study of fees charged by medical providers, such as the data base profile set up by the Health Insurance Association of America (HIAA). Some insurers compile their own data using their own claim information; UCR can therefor vary by carrier. Carriers use these statistics to chart a range of fees for each geographical area in which services are provided. Then, when you submit your claim for a specific treatment or procedure, the insurer pays all or part of the claim, depending on whether the amount of the claim is within the Usual and Customary allowance. The amount that the insurance carrier pays is called the allowed amount, the remainder is the write-off amount.
ALL carriers consider their fee schedules to be "proprietary" (confidential information belonging to the insurer, not shared with the public). If there is time you can request a predetermination of benefits from the insurance company. Most carriers will request a written statement from the doctor with the industry CPT codes for the proposed procedures before providing a predetermination of benefits.
Many carriers utilize medical bill review companies. These entities review procedures by CPT code and evaluate the reasonableness for the procedure in accordance to protocols established for each ICDM-9 diagnosis code. Procedures may be denied as not necessary for any arbitrary ICDM-9 dx. The charge for that CPT code would then be forwarded by the provider to the patient in accordance to established UCR billing. The difference between billed and UCR is writen-off.
Suppose an insurer determines that it will pay UCR fees falling below the 80th percentile of the fee range. If you have a tonsillectomy and your medical provider charges a fee for a tonsillectomy that is higher than what 80% of the providers charge in that region (according to the insurer’s UCR fee schedule), the plan will exclude coverage for the amount over the 80th percentile and that amount will be the patient's responsibility. If your provider charges a fee that is below what 80% of the providers in the region charge for a tonsillectomy (according to the company’s usual and customary fee schedule), your claim will not be reduced. The patient coinsurance amount is calculated after the UCR fee is determined. Therefore, if your policy pays 80% for the tonsillectomy, the benefit paid will be 80% of the UCR fee (which is calculated at the 80th percentile).
If the provider is "non-participating" (doesn't have a contract) with the carrier, they are NOT under any obligation to accept the reasonable and customary payment whatsoever either in part or in full; the patient may be balance billed. If the provider is participating (has a contract) with the carrier, the patient may not be balance billed, except for co-payments and/or co-insurance (if applicable). That constitutes insurance fraud; contact the carrier and ask that it step in. Depending on the circumstances that could result in denial of ALL claims made by that provider. It is really no different than disputes made by a customer against a vendor.
If the patient is covered by a preferred provider option policy (PPO), then they must use participating providers to obtain the best benefit available under the policy. The PPO policy allows the patient flexibility to use non-preferred or non-participating providers (as opposed to Health Maintenance Organizations (HMOs), which explicitely limit the patient to the closed network of providers). However, this flexibility may come at a great out of pocket cost which may not be realized when reviewing benefits. Many PPOs now pay non-participating providers based upon the negotiated rate that would have been paid to a participating provider had one been used one. For example, let’s say that a PPO policy pays 70% for non-participating surgeon charges and a bill for $5,000 is incurred from a non-participating surgeon. Now let’s say that a participating provider would have been paid $2,000 for the same surgery. Using the contracted or negotiated rate as a basis for payment, the carrier will pay 70% of $2,000 for the surgery. The patient's out-of-pocket will be $600.00 for the 30% copayment and another $3,000 for the amount over the negotiated fee. NOTE: the $3,000 does not accrue to the out-of-pocket maximum on the policy.
Another fee methodology being used by some carriers is payment for non-participating provider claims based on a percentage (for example 200%) of the Medicare published rate for the same or similar service. This methodology can result in very low reimbursement of the non-participating provider claim because Medicare rates are relatively low rates established by the federal government for payment of Medicare claims.
Cost accounting for medical providers is one of the most complicated subjects known to man. What has to be kept in mind is that for any provider there are fixed and variable costs. As soon as the patient walks into the door they're paying for the rent, utilities, salaries and maintenance costs. Moreover, there are several schools of thought with regards to equipment. Suppose that a facility acquires a major piece of diagnostic equpment costing $15 million.
According to Generally Accepted Accounting Principles (GAAP), the equpment must be depreciated w/in a set period of time. Typically after 5 years the equipment has residual value that of scrap. So $15 million over 5 years is straight line depreciation of $3 million per year. You either use that equipment on everybody, or you only use it once per year. If you do one test per day, each test would cost $8200. OR you charge $5000 per test, and spread the remaining $1.6 million equitably across ALL other procedures performed. Otherwise each test costs $3 million. Suppose the insurance company pays $5000 per test. That means that $2.995 million would be distributed across ALL other procedures. On the other hand, if the equipment is used on EVERYBODY, although per test costs are much less the equipment wears out faster and significant repair expenses are incurred. Furthermore, the equipmnt may not be available in an emergency.
One of the major costs incurred by medical facilities are that of emergency care and trauma facilities. Now throw in the GAAP allowance for doubtfull accounts and cost accounting for medical facilities can quickly become an intractible mess.
One solution that has been proposed is establishment of fixed pricing. Each and every item has a fixed price and each and every occupation has a specific wage. These things are established by edict.