RangerDave wrote:
Emphasis mine.
So what about uninsured patients? And what about charges over and above what insurance covers (e.g. deductibles, co-pays, coverage caps, pre-existing conditions, rejected charges, etc.)? Are the hospitals' declared charges relevant in those cases? Presumably the hospital doesn't just shrug it's shoulders and write all that off without at least trying to collect. My parents spent about $20k out of pocket last year on treatment that was outside their insurance coverage (deductibles, co-pays, etc.). If the hospitals and labs are charging rates 5-100 times their actual cost with respect to that uncovered treatment, then it seems clear to me that those inflated rates do have a bearing on what my parents paid.
Okay, so the first real and rational questions emerge.
Good thoughts, thanks RD.
First, uninsured patients: uninsured patients are the only patients for whom
charged amounts might apply; however, this is unlikely at a "non-profit" (NFP) hospital. Why? Because that hospital must deliver some charity care, and the easiest way to give charity care is to discount services provided to uninsured patients. You then write off the difference. My prior employer's charity policy
started at 50% write off. My current client starts at 40%. Basic means-testing is done, but any hospital that isn't well behind the times will tabulate the impact of the bill itself on household finances as well, not just run income checks.
This is one area that the Patient Protection and Affordable Care Act (Obamacare) actually has done well: NFP hospitals have to be more transparent in their charity practices and make it known to all patients (as opposed to only uninsured patients) that financial assistance is available. [Personally, I think Obama had this part inserted out of guilt for his wife's hospital being investigated for giving away too little charity care, but that's just my Obama hate]
What this means is that, in the future, patients will be even less likely to take catastrophic losses due to financial assistance. Since doing so actually can help a hospital's top line, nobody really loses from this (except for the extra labor cost to educate patients, but that's minimal at medium sized facilities and larger).
Now let's get to your second point/question:
RD wrote:
And what about charges over and above what insurance covers (e.g. deductibles, co-pays, coverage caps, pre-existing conditions, rejected charges, etc.)? Are the hospitals' declared charges relevant in those cases? Presumably the hospital doesn't just shrug it's shoulders and write all that off without at least trying to collect. My parents spent about $20k out of pocket last year on treatment that was outside their insurance coverage (deductibles, co-pays, etc.). If the hospitals and labs are charging rates 5-100 times their actual cost with respect to that uncovered treatment, then it seems clear to me that those inflated rates do have a bearing on what my parents paid.
Let's talk some word usage and nomenclature first, so we have a common understanding, i.e. "charges over and above what insurance covers." These are not things that "insurance doesn't cover" [quotes do not indicate Googlable terms, just codifications of usage] they are either "exclusions" or "negotiated patient responsibilities."
Exclusions would be things like "coverage caps and pre-existing conditions." Coverage caps no longer legally exist under Obamacare. Pre-existing condition exclusions have not been legal on group plans since the Healthcare Information Portability and Accountability Act (HIPAA) was passed in 1996. Obamacare made these exclusions illegal for individual plans as well.
Rejected charges do not, or rather should not, be sent to the patient. It is the provider's obligation to ensure payment for these services will be secured from the insurance. Failure to do so and then billing the patient would generally be a winnable lawsuit for a patient.
Negotiated patient responsibilities would be things like co-pays, deductibles, co-insurance, etc. These are negotiated, in the vast majority of cases for the American public, between your
workplace and the
insurance company. They exist by design as a type of risk-sharing, and are meant to actively
dissuade patients from overconsuming healthcare. In other words, don't like it that your deductible is $10,000? ***** to your employer, not to the doctor.
Additionally, these patient responsibilities are not "things not covered," they are simply cost sharing. They often vary by service type (emergency, urgent, primary care, pharmacy, etc.) because the risk to the insurance company is different by service type.
Now, all that said, if your parents had $20,000 in out of pocket medical expenses last year, and are NOT on Medicare or a Medicare Replacement Plan (Part C), then this is because the insurance that (most likely) their employer has provided them with has negotiated with the insurance to have their employees have XYZ responsibilities. Feel like they're paying to much? ***** to the employer.
If your parents ARE on Medicare or Part C, then ***** won't really matter, because all of those out of pockets have been declared by Federal regulation.
Notice how charges don't enter the picture of either of those scenarios? That's because, in the current age of hospital finance,
charges are essentially irrelevant for insured patients. Charges don't really enter the picture for private insurer/hospital negotiations, only last year's contract enters the picture (and probably Medicare's rates as well).
Now, back in the day before HMO's came around in the 80's, charges mattered a lot, because insurance contracts were modeled around paying a percentage of total charges. There are still some legacy contracts and insurance agencies out there doing this, but they are
very few and far between because insurance companies aren't stupid.
As for why patients who have cancer may see such high bills, that's because most insurance companies have negotiated with employers not to cover cancer treatments. Why? Because cancer treatments are *** expensive, which would jack the company's insurance costs, lowering their bottom line. Therefore, for those services, charges
may enter the picture, because patients could generally be considered "uninsured" for those specific services, despite having excellent insurance for other things.
Therefore, and most importantly,
people upset about this should ***** at 1) their insurance company and 2) their employer. They negotiated what is covered and what isn't, not the hospital.Hope this all makes sense.
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