4 ms·

Can you help me understand, if charging differing rates to the insurers is verboten, why a "cash only" patient can often (and easily) receive a substantial disc

Can you help me understand, if charging differing rates to the insurers is verboten, why a "cash only" patient can often (and easily) receive a substantial discount off their medical bills just by asking for it? I'm not being adversarial, I honestly don't understand it, and would like to. It seems to me that the "cash" rate is what the "market will bear", which makes the hospital administration complicit in defrauding taxpayers and the general insured by overcharging for procedures and consumables when an insurer is the one receiving the bill. I suspect there's more to it, though, and I've never been able to figure out what it is.

gleb 10y ago
I believe such self-pay discount is given "under the table." I.e. the provider is breaking Medicare rules, but expects not to get caught. Which is why you cannot get large providers to do this.
asolove 10y ago
I am not an expert, but as someone who has occasionally paid cash for medical procedures, I know one way it happens: deliberately mis-classifying procedures. You've probably seen doctors check off a few things in a tiny print grid that you then hand to the receptionist to pay for your appointment. Many of the things on that are judgement calls or close enough to each other that anyone not in the room could never tell which it really was. For example, if you go to your eye doctor, they can bill you for a standard visit, a refraction (getting your prescription), an eye health check, a super-duper health check because they found something and needed to look at it more, an eye health check with dilation, etc. I have gone to eye doctors who will do everything and then ask at the end of the appointment what my insurance situation was. If I'm on insurance, bang, they charge me for all of it. If not, they just charge me for the refraction and forget about the rest.
lawpoop 10y ago
What happens is that hospitals and other health care organizations negotiate a rate per procedure, not per patient. They look at how much it "should" cost, based on materials and doctor's time. You can't go to an insurance company and say, "I know we negotiated a rate of X for this procedure, but the patient is poor, so I'd like to charge less for it." Well, you can, but the insurance company would come back with "Sorry, that's not in our agreement. X for procedure Y." Or worse: "So, you can actually charge less for procedure Y? In that case, we'd like you to charge that lesser rate anytime you perform that procedure, regardless of the wealth of the client."
riahi 10y ago
There's multiple factors to this and multiple ways despite laws against this that it happens. 1. They incorrectly code the encounter leading to a lesser charge. This is Medicare fraud if the doctor ever get audited, but if it's a tiny practice and no one whistleblows on the Doctor, the odds of a small practice getting audited are very low. 2. They charge the cash paying patient the full amount. Then enter a period of "negotiation" and then accept the lesser payment and write off the balance as charity care. This is more legal, but leads to people coming on online forums and bitching about a $3000 bill only to reveal it got lowered to $700. The issue here is that the doctor is super busy and unless it's a micropractice where the doctor is the one billing, some biller/coder somewhere else will send you nasty grams until the doctor intervenes and tells them to write off the balance. You have to remember, it is law in this country that you must bull accurately. Either coding too high or too low is considered equally fraudulent which Medicare will send its auditors after viciously. The only way to go outside the system 100% legally is to completely opt out of Medicare/Medicaid. Anything less is fundamentally a gray area that relies on the practice not having someone mad and whistleblowing on them to a RAC. Whistleblowers are entitled to a portion of the fine, so the incentive is there for a disgruntled employee just to whistleblow even on the doctors who undercharge as a kindness to their patients. When you hear doctors say the government has royally screwed up healthcare, this is fundamentally what they are talking about. I can either offer reasonable/negotiable prices on a cash basis or I can participate in the insurance game, but not both. My biggest fear is that they eventually make participation in Medicare / Medicaid a requirement of licensure, effectively making the cash pay system illegal.

gleb 10y ago

I believe such self-pay discount is given "under the table." I.e. the provider is breaking Medicare rules, but expects not to get caught. Which is why you cannot get large providers to do this.

asolove 10y ago

I am not an expert, but as someone who has occasionally paid cash for medical procedures, I know one way it happens: deliberately mis-classifying procedures. You've probably seen doctors check off a few things in a tiny print grid that you then hand to the receptionist to pay for your appointment. Many of the things on that are judgement calls or close enough to each other that anyone not in the room could never tell which it really was. For example, if you go to your eye doctor, they can bill you for a standard visit, a refraction (getting your prescription), an eye health check, a super-duper health check because they found something and needed to look at it more, an eye health check with dilation, etc. I have gone to eye doctors who will do everything and then ask at the end of the appointment what my insurance situation was. If I'm on insurance, bang, they charge me for all of it. If not, they just charge me for the refraction and forget about the rest.

lawpoop 10y ago

What happens is that hospitals and other health care organizations negotiate a rate per procedure, not per patient. They look at how much it "should" cost, based on materials and doctor's time. You can't go to an insurance company and say, "I know we negotiated a rate of X for this procedure, but the patient is poor, so I'd like to charge less for it." Well, you can, but the insurance company would come back with "Sorry, that's not in our agreement. X for procedure Y." Or worse: "So, you can actually charge less for procedure Y? In that case, we'd like you to charge that lesser rate anytime you perform that procedure, regardless of the wealth of the client."

riahi 10y ago

There's multiple factors to this and multiple ways despite laws against this that it happens. 1. They incorrectly code the encounter leading to a lesser charge. This is Medicare fraud if the doctor ever get audited, but if it's a tiny practice and no one whistleblows on the Doctor, the odds of a small practice getting audited are very low. 2. They charge the cash paying patient the full amount. Then enter a period of "negotiation" and then accept the lesser payment and write off the balance as charity care. This is more legal, but leads to people coming on online forums and bitching about a $3000 bill only to reveal it got lowered to $700. The issue here is that the doctor is super busy and unless it's a micropractice where the doctor is the one billing, some biller/coder somewhere else will send you nasty grams until the doctor intervenes and tells them to write off the balance. You have to remember, it is law in this country that you must bull accurately. Either coding too high or too low is considered equally fraudulent which Medicare will send its auditors after viciously. The only way to go outside the system 100% legally is to completely opt out of Medicare/Medicaid. Anything less is fundamentally a gray area that relies on the practice not having someone mad and whistleblowing on them to a RAC. Whistleblowers are entitled to a portion of the fine, so the incentive is there for a disgruntled employee just to whistleblow even on the doctors who undercharge as a kindness to their patients. When you hear doctors say the government has royally screwed up healthcare, this is fundamentally what they are talking about. I can either offer reasonable/negotiable prices on a cash basis or I can participate in the insurance game, but not both. My biggest fear is that they eventually make participation in Medicare / Medicaid a requirement of licensure, effectively making the cash pay system illegal.