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Doctor's Bills; a Primer
Posted Tuesday, November 27, 2007, at 10:01 PM<< Previous | Read comments | Respond | Email link | Next >>
This is not an editorial. I am just taking a few moments to let folks know about how a Doctor (not a Hospital - that is a completely different story) bills patients. First, some history. In the old days, not so long ago, Doctors would come into town, put up a shingle, and begin a practice of caring for his patients and their families. He would charge a reasonable rate based on his efforts, usually accepting non-monetary payment for services, much like a barter system. He was fair, made people better, and was well-respected because of it. It was a good life for everybody. More people decided to become doctors because of this respect, so more shingles were hung. Competition and specialization, along with prices, began to escalate. Insurance salesmen entered the picture, offering coverage of health care costs for a premium. Since serious health problems were relatively rare, insurers profited while continuing to pay doctors whatever they charged for services. Smelling a windfall as a doctor, more people went to medical school, and soon Doctors became filthy rich charging whatever they wanted and getting paid large sums of money by insurers, including the government. The general public really didn't care at this point...they went to the doctor and someone else paid the bill. Well, the people paying the money began to wise up. They developed regulations for Medicare that insurers soon adopted. All of a sudden, Doctors were being presented with contracts, stating that they, the Doctors, had to accept what the insurers paid them or else they wouldn't get paid and the patient would go to another Doctor who did sign that contract. The government, insurers and the AMA (American Medical Association) decided to get together and create a unified language of billing so that everything a doctor did was codified and given a relative value, so that standardized charges could be developed. All the while, medical care was getting much more complex and much more expensive. As Doctors lost control of charges, insurers kept payments to Doctors less to keep profit margins up.
So, where are we today? When you go to the Doctor for any kind of visit, he or she will fill out a form outlining what he did and submit a code to your insurer according to standardized protocols. This code determines how much he will get paid. Usually, there are levels of complexity for each visit. More complex visits (for emergencies or new patients) get coded at a higher level, and paid more. Procedures also have codes, which have to match a particular diagnosis, or they don't get paid. The complexity and cost of this process is enormous. Should you care what the Doctor charges even if the insurance pays? You bet you should. Take a look at your final Doctor bill and compare it to the EOB (Explanation Of Benefits) form you get from your insurer. Take a good close look at this EOB...there is some eye-opening information on it. Is what your Doctor billed consistent with what he did? Is what your Doctor got paid consistent with what he did? Why didn't the insurer pay the Doctor for that procedure he did? Why did the Doctor get paid $200 for the appendectomy, but nothing at all for the office visits after surgery? This is all oversimplified of course. The take-home message is: we all pay for health care and insurance...even that provided by our employer. We should be acutely aware of how the money changes hands, and into whose pockets most of it flows. Comments Showing most recent comments first [Show in chronological order instead] |
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Doc Baker,
Sent you email yesterday. Alot would consider what I have to say spam-ish. Is your filter on? You can email me from the blog site menu, I think.
My wife would sure get nervous about that one.
Mr. Mills... don't be surprised if you get billed for the nursery too. We never used it, but got billed for 3 days use, even tho the baby stayed in room with me after birth.
Go figure, lol!
I stand corrected. I never looked at the actual bill, (got nauseous when I heard the amount) it IS for the hospital. Stayed less than 24 hours to meet some qualification. I truly like the facility bbbbut $30,000?
And then we will probably get bills from the anesthesiologist, housekeeping, the lady at the front desk .... I know I am exaggerating, but it seems like they come from all angles after something like this.
Mr. Mills,
Look again at your bill. I assure you that the surgeon's procedure fee is nowhere close to $30K. These are more in line with hospital charges. Even the most elaborate and complicated procedures do not bill more than $5K, and usually pay much less (not including plastic surgery and weight loss surgery). Hospital charges are definitely inflated, and this directly affects the uninsured, who can be charged any "reasonable" amount.
Many Docs, esp. OBs, make contractual arrangements with patients for all fees up front. These contracts have stipulations regarding any additional charges for certain unforeseen treatments, like C-sections.
I would bet the doctor took the C-section possibility into account. If she did not have to do it, she gets a little extra, but since she did, it balanced out. Just a guess.
My recent surgery bill (only from the surgeon) was billed out at $30,000 but insurance is only paying $10,000 and says we owe nothing more. Is the bill intentionally inflated? Would a non-insured person have to pay $30,0000?
The reason I parenthesized the "only from the surgeon" is because it is mind-boggling how many other services send you a bill. And mind-numbing to figure it all out.
I have one question. Now, I kinda understand that the insurance company sets limits to pay doctors for procedures and visits, etc., and that the doctors accept what the insurance companies offer.
But............ What if the patient is uninsured and pays for the procedures out of pocket? How does the physician determine the cost of procedures/visits then? When I was preg with my son, my husband was self-employed with no insurance. We footed the bills out of our own pocket. My Ob/Gyn set a price of $1200 due in full before delivery, and we paid monthly installments. Unbeknownst at the time of my prenatal visits, my delivery warranted a Cesarean Section. We already had a receipt marked "Paid in Full", and she did not even attempt to charge us further for the surgery. Would she have been in the right to do so? Maybe... she did her job, and did it well. But, how much would she have been paid had we had insurance at the time?
Now, the question above was not intended to be a gripe. We were quite pleased with the doctor and her services. But, if this were a thread about BCMS in 2001, there wouldn't be enough bandwidth for me to list my complaints on that subject.
Sorry about the double post. Stupid Mac.......
Medicine is a true economic anomoly. In any other market, the more competetion you have, the lower prices go. We no longer have a normal consumer/provider realtionship since insurance companies now artifically set prices to benefit them, not the patient. Competition is further stiffled by the billing and coding process since it is so complicated that the average consumer (the patient) has absolutely no hope of ever deciphering it. So prices for services remain a mystery.
Hey if you get a chance I need to ask you some questions about the new hospital. E-mail me or let me know if I can call you at the office. hsvraddoc@yahoo.com
Medicine is a true economic anomoly. In any other market, the more competetion you have, the lower prices go. We no longer have a normal consumer/provider realtionship since insurance companies now artifically set prices to benefit them, not the patient. Competition is further stiffled by the billing and coding process since it is so complicated that the average consumer (the patient) has absolutely no hope of ever deciphering it. So prices for services remain a mystery.
Hey if you get a chance I need to ask you some questions about the new hospital. E-mail me or let me know if I can call you at the office. hsvraddoc@yahoo.com
Very eloquent way to say we have the cart before the horse. As long as the insurer decides what procedures and treatments are in order, physicians are no longer in control of a patient's treatment.