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Originally Posted by Rainger99
I have the same question. I can’t figure out why Medicare was overcharged. It seems that the advantage insurers were the ones that were overcharged. Although no one has explained whether increasing RAF scores increases payments to UHC or to TVH of to both.
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Medicare isn't overcharged. Medicare and Medicaid are the worst (aka lowest $$ payors). Private healthcare will pay more, which "helps to keep the lights on." Keeping the lights on is VERY expensive when you have to take into account the payor mix (percentage for no-pay patients, Medicare, Medicaid, private). Everyone has to be billed the same amount, so if Medicare will only pay $100 for "X", Medicaid won't pay anything for "X", and BCBS will pay $300 for "X", you bill $300 knowing Medicare will pay $100, Medicaid won't pay, and you'll get your $300 from BCBS and the self-pays are usually written off. Some of our hospital's insurance company contracts were written to pay a percentage of billed (e.g. 30%), so we'd have to bill much more than Medicare pays just to get paid the same as Medicare. I haven't been involved in setting charges for many years, but we used to take the Medicare payment rate and multiply by 2.5 to set our price.