re: Shoulder surgery cost...bananas.

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What is the purpose of the insane bill sent to the insurance company? Just a game to see what they will/won't pay? Padding the bill to get more money out of insurance?

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Its an artifact from older contracting methods that were based on percentage of billed charges.

quote:

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What is the purpose of the insane bill sent to the insurance company? Just a game to see what they will/won't pay? Padding the bill to get more money out of insurance?

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Multiple reasons:
1) can't charge people different rates based on their insurance. So insurance A pays $5, B pays $7 and C pays $12 for a procedure. Hospitals/doctors charge $15-20 just to cover everyone and make.sure they get every bit of allowable they are entitled to.

2) I do agree that people get a kick out of see the discount from what was charged to what was paid. It's the exact reason this thread was even created.

3)to some extent hospitals may be able to "write off" the differences in the charges even though it's not anywhere near what their reimbursement would have been otherwise.

We'd all be better off (physicians and patients) if there was more upfront pricing transparency. Easier said than done for some medical services though. Insurance gets to claim look at how much we're saving you.

Double post

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What is the purpose of the insane bill sent to the insurance company? Just a game to see what they will/won't pay? Padding the bill to get more money out of insurance?

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Insurance companies pay a percentage of the gross charges. Whatever percentage the facility/clinic negotiates in their contracts is what is paid by the insurance, with some contractual information set aside to cover specific types of procedures. Most of the gross charges are inflated because Medicare pays at a low enough percentage that they have to be inflated for hospitals and clinics to have any revenue.