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Originally Posted by snbrafford
I worked for a BCBS company. Hospitals, doctors, pharmacies routinely would threaten to drop their acceptance around contract renewal time as a negotiation method to improve the items mentioned - payment amounts, service, payment time, etc. Few providers can afford to drop the large carriers like Humana, BCBS, or United.
Next time you get an explanation of benefits from your insurance - look at the great difference between what the provider billed and what the insurance company paid (based on contract with the provider). If you did not have insurance, you most likely would be paying what the provider billed.
Medicare drives a lot the entire process but the insurance companies stand between us and Medicare (assuming you are in a MA plan). The insurance companies are held hostage to Medicare paying their claims too in a timely manner.
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The reason hospitals bill more is many contracts with private payors are set to reimburse a percentage of the amount billed. If company "X" pays 1/3 of billed, then the hospital has to bill 3x Medicare rates just to get the same amount from a private payor. Most private companies pay more than Medicare because Medicare isn't fair compensation for services and that's the dirty little secret! Medicare may change the way the pie is sliced, but the pie seldom grows beyond inflation. Medicare may increase the rate for some services, but they'll cut others to offset it. Over the decades I'd worked in radiation oncology, Medicare had bundled so many things at a MUCH LOWER overall amount. Imagine owning a car repair shop and someone comes in needing a tune-up, and the government says you can charge for the tune-up but not the new spark plugs or wires because that's bundled into the tune-up charge. The government would increase the reimbursement of the tune-up, but not by enough to cover plugs, wires, etc.
On the flip side, insurance companies would sometimes deny the first billing submission automatically without any good reason, just to be able to sit on and use the money a little longer. We would have insurance companies argue about how many treatments they'll pay for, in spite of how many it actually took to properly treat. Doctors would spend time at least weekly, doing peer-to-peer discussions with insurance companies having to explain why a patient needed "X" radiation treatment and their "peer" is some pediatrician with no significant knowledge of radiation oncology or even oncology! Then there's the endless requests for more documentation, even when treatment already has an authorization... just to hold the money a little longer. Then they'll deny week 3 of 5 weeks treatment!
It's not simple. Government price controls, insurance company greed, hospitals and doctors gilding the lily with care beyond what's reasonably justified. Maybe if we go to case-rates based on injury, decease, stage, etc. that removes all the arguments about what care is needed/justified.