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This story is total fake news. The patient is a teacher with a Cadillac health insurance plan. She paid $75 co-pay. The $10,000 bill is an illusion printed by t

This story is total fake news. The patient is a teacher with a Cadillac health insurance plan. She paid $75 co-pay. The $10,000 bill is an illusion printed by the insurance company to make her think that her insurance is actually valuable. No one was paid $10,000. The hospital was paid a secret negotiated rate much much much much lower than $10,000.

munk-a 7y ago
The provider was paid 3,000 by the payor - that's how insurance billing works. It absolutely is a rats nest when it comes to finding out pricing information but the number on the bill is what ended up changing hands (less, possibly, any amount not covered and defaulted on by the patient). I believe you're thinking of the provider's chargemaster and the pricing discrepancies there - this procedure was billable as 10,000 to a patient without insurance with the 7,000 discount being the payor's preferred rate - that 10k is the BS number that (mostly[1]) no one ever pays, while this 3k is the actual amount changing hands - for the patient the out of pocket cost is the most visible portion, but that bill was fully paid. 1. Mostly everyone except for the uninsured or out of network - those folks will get stuck with that BS price 7k price, which is there since payors always want to feel like they're paying discount prices. (edit - corrected numbers to be in line with the actual bill)
- m0zg 7y ago
  Insurance _never_ pays as much as they bill. This is one of the reasons to have it in the first place: each insurance company has negotiated rates with the hospitals. Even if you have high deductible, you'll still be getting negotiated rates, not the bullshit they (try to) charge people with no insurance at all. IMO, this is one thing that should be made totally illegal, no matter where one lands on the political spectrum: cash customers should be "favored", meaning cash price must match or be lower than the lowest insurance negotiated rate for each procedure. Anything else is just stupid and unfair. That way if the insurance pays five cents for the paper cup the pills come in, you can't charge fucking 13 dollars for the same thing if I pay cash.
  - munk-a 7y ago
    I agree and find it utterly outrageous. I'm lucky enough to have avoided any hospitalizations in my adult life, but I am quite familiar with this BS on the pharmaceutical side, in another comment on this article[1] I broke down that "preferred partner" price difference as I experienced it personally and it is insane that these pricing differences are allowed to continue. Also, bear in mind it's not just patients paying in cash - all these rules also apply to anyone unlucky enough to be treated out of network, even if it's just because they were brought to the wrong hospital while unconscious. 1. https://news.ycombinator.com/item?id=22550564 https://news.ycombinator.com/item?id=22550564
triangleman 7y ago
The insurer paid about $3000 according to the screenshot. The $10,000 is an illusion but I believe it's for tax purposes. If someone gets a $10k bill and the hospital eventually writes it off, they can write off the whole 10k.
- jfk13 7y ago
  So it's basically fraud, then. OK, nice to have that clear.

munk-a 7y ago

The provider was paid 3,000 by the payor - that's how insurance billing works. It absolutely is a rats nest when it comes to finding out pricing information but the number on the bill is what ended up changing hands (less, possibly, any amount not covered and defaulted on by the patient). I believe you're thinking of the provider's chargemaster and the pricing discrepancies there - this procedure was billable as 10,000 to a patient without insurance with the 7,000 discount being the payor's preferred rate - that 10k is the BS number that (mostly[1]) no one ever pays, while this 3k is the actual amount changing hands - for the patient the out of pocket cost is the most visible portion, but that bill was fully paid. 1. Mostly everyone except for the uninsured or out of network - those folks will get stuck with that BS price 7k price, which is there since payors always want to feel like they're paying discount prices. (edit - corrected numbers to be in line with the actual bill)

m0zg 7y ago
Insurance _never_ pays as much as they bill. This is one of the reasons to have it in the first place: each insurance company has negotiated rates with the hospitals. Even if you have high deductible, you'll still be getting negotiated rates, not the bullshit they (try to) charge people with no insurance at all. IMO, this is one thing that should be made totally illegal, no matter where one lands on the political spectrum: cash customers should be "favored", meaning cash price must match or be lower than the lowest insurance negotiated rate for each procedure. Anything else is just stupid and unfair. That way if the insurance pays five cents for the paper cup the pills come in, you can't charge fucking 13 dollars for the same thing if I pay cash.
- munk-a 7y ago
  I agree and find it utterly outrageous. I'm lucky enough to have avoided any hospitalizations in my adult life, but I am quite familiar with this BS on the pharmaceutical side, in another comment on this article[1] I broke down that "preferred partner" price difference as I experienced it personally and it is insane that these pricing differences are allowed to continue. Also, bear in mind it's not just patients paying in cash - all these rules also apply to anyone unlucky enough to be treated out of network, even if it's just because they were brought to the wrong hospital while unconscious. 1. https://news.ycombinator.com/item?id=22550564 https://news.ycombinator.com/item?id=22550564

triangleman 7y ago

The insurer paid about $3000 according to the screenshot. The $10,000 is an illusion but I believe it's for tax purposes. If someone gets a $10k bill and the hospital eventually writes it off, they can write off the whole 10k.

jfk13 7y ago
So it's basically fraud, then. OK, nice to have that clear.