[SHIBUMI]

Dodgy Doctors or Not..........

Lets say a Doctor charges you (bills insurance) $5,000 for a 1 mg medication shot.

Medicare will only cover $3,000 for that shot.

Does the doctor have a $2,000 loss that he can deduct on his tax return???

If so, we talking about a half million dollars or more of tax deductions--based on trumped up charges.

Thanks for your expertise..........

[retiredguy123]

No. The doctor must pay taxes on the actual income earned minus his actual expenses. He cannot deduct potential income that he doesn't collect. One reason for charging more than he can collect from Medicare is that he can charge cash clients the higher rate and claim that is his retail rate.

[SHIBUMI]

ethical? Creating ballooned prices for those with no insurance?

Originally Posted by retiredguy123

No. The doctor must pay taxes on the actual income earned minus his actual expenses. He cannot deduct potential income that he doesn't collect. One reason for charging more than he can collect from Medicare is that he can charge cash clients the higher rate and claim that is his retail rate.

[retiredguy123]

Originally Posted by SHIBUMI

ethical? Creating ballooned prices for those with no insurance?

Well, it also works the other way around. The doctor must charge Medicare the same list price as a cash client. So, if the doctor charges Medicare more than he charges a cash client, Medicare will claim fraud. The cash client must pay at least the Medicare allowed amount. So, the doctor can charge a cash client more than the Medicare allowed amount, but not less. Is it unethical? Yes.

[blueash]

Originally Posted by SHIBUMI

Dodgy Doctors or Not..........

Lets say a Doctor charges you (bills insurance) $5,000 for a 1 mg medication shot.

Medicare will only cover $3,000 for that shot.

Does the doctor have a $2,000 loss that he can deduct on his tax return???

If so, we talking about a half million dollars or more of tax deductions--based on trumped up charges.

Thanks for your expertise..........

Did you ask Google or do you just want to start a fight about medical billing?

[blueash]

Originally Posted by retiredguy123

Well, it also works the other way around. The doctor must charge Medicare the same list price as a cash client. So, if the doctor charges Medicare more than he charges a cash client, Medicare will claim fraud. The cash client must pay at least the Medicare allowed amount. So, the doctor can charge a cash client more than the Medicare allowed amount, but not less. Is it unethical? Yes.

There is absolutely nothing unethical about it. The doctor is REQUIRED to bill the same charge to all patients for an identical service whether the patient is self pay, commercial insurance or government insurance. So the 5000 in the OP's post is the charge to every patient. Medicare might only pay 3000, but United Airlines insurance might pay 4999. Medicaid might pay 2000, BCBS of NY might pay 4200. The doctor tries to keep the billed charge higher than the maximum payment of any carrier and eats the write off of the poor payers. But everybody is billed the same "usual and customary"

[retiredguy123]

Originally Posted by blueash

There is absolutely nothing unethical about it. The doctor is REQUIRED to bill the same charge to all patients for an identical service whether the patient is self pay, commercial insurance or government insurance. So the 5000 in the OP's post is the charge to every patient. Medicare might only pay 3000, but United Airlines insurance might pay 4999. Medicaid might pay 2000, BCBS of NY might pay 4200. The doctor tries to keep the billed charge higher than the maximum payment of any carrier and eats the write off of the poor payers. But everybody is billed the same "usual and customary"

Not exactly. What is unethical is when the doctor raises his price to the Medicare limit to get the maximum payment from Medicare and charges all clients the maximum limit to avoid a fraud claim from Medicare. So, the Government always pays the maximum.

[dewilson58]

Originally Posted by SHIBUMI

Does the doctor have a $2,000 loss that he can deduct on his tax return???

If so, we talking about a half million dollars or more of tax deductions--based on trumped up charges.

Thanks for your expertise..........

Not really.

The Doc has $3k of income on his return.

No reason to show $5k of income and a $2k deduction.........just show $3k of income.

[Sparky99]

Why did the taxpayer cross the road? To avoid the IRS!

[Gigglesmom]

I have been managing hospital-based physician professional component medical billing for 40 years. Practices/physicians (in and out of hospitals) usually will set fees slightly above the highest allowed amount from any of their managed care contracts. They are required to accept no more than the allowed amount from any carrier (in or out of network). The difference between the fee and allowed amount is adjusted off and called a disallowance. It is not tax deductible. The remainder is the patient’s deductible or co-pay. As for uninsured patients, groups will heavily discount their base/full fees. Hospitals often discount 80% or more, often accepting less than they would be paid by Medicaid. Physicians who are contracted to perform services in hospitals, but are independent practices (radiologists, pathologists, ER providers, anesthesiologists and others) often have contractual obligations to the facility to match their discount rates for uninsured patients. There are no rules governing their fee structures at all.

[retiredguy123]

Whether something is unethical or not is a matter of opinion. In my opinion, charging different prices for insured vs uninsured customers is unethical, in any business.

[CoachKandSportsguy]

Originally Posted by retiredguy123

Whether something is unethical or not is a matter of opinion. In my opinion, charging different prices for insured vs uninsured customers is unethical, in any business.

LOL! um a bit ignorant for a sweeping generalization .. . . .

The "rates" are set by the doctor's office such that the blend of expected patients, cash, medicare, health insurance, which all have negotiated rates, can keep the medical office, physician, hospital able to pay its bills and stay in business.

A medical office, doctor, can not remain in business if the only rate accepted is the medicare rate. most hospitals and doctors office need non medicare higher rates and patients to survive to stay in business. Otherwise they must rely on CMS annual reimbursements for improvements to stay in business. Small hospitals and medical practices going out of business is very common, because they can't get sufficient revenue mixes to overcome their fixed expenses. hospitals also have different CMS designations, based upon size and area for reimbursements.

As far as the billing accounting goes, that is acceptable accounting practice to
bill the office rate, and then to write off the difference between insurance and the invoiced amount to the balance sheet account "Allowance for doubtful accounts"

The technical accounting here for taxable income is
$5,000 invoice = credit Revenue and debit Accounts Receivable.
$3,000 Received = Debit Cash and credit Account Receivable
$2,000 write off = Debit Write offs and credit Allowance for Doubtful accounts

Taxable Revenue = 3,000

Service accounting != <> does not equal product accounting.

Simple product accounting = Widget Sold Revenue - Widget Cost = Widget Gross Margin / Gross Profit very strong linear relationship - office expenses = operating income

Service Accounting is big bucket accounting with a weak linear relationship

Total Revenue bucket from different sources - total office expenses bucket = operating income. The biggest office expense after the doctors is EMRs and billing.

The big difference is that the customer insurance reimbursement rate varies based upon the customer's insurance, but the actual total activity labor and office expense doesn't change. If its a shot, that's pretty straight forward standard cost, but if all the business done are shots, that won't be enough revenue to pay for the fixed expenses. . if its a procedure with time billing, then the time varies but the cost of office has not changed. Insurance generally pays for a procedural rate, not the actual time and material individual rate.

That's also why there are clinics, which are minimal annual cost locations which do mostly simple stuff, and try to keep all expenses to a minimum so the billable rates can be low enough and still survive.

Wife's cousin had a knee replacement, she has medicare and a full supplemental plan. The office still required a credit card with a minimum $10,000 limit to charge any cost which wasn't covered by the insurance companies. no write offs given there!

Have spent most of my finance career with service accounting with several different types of service accounting methods. . so its not always as simple as widget accounting which is more commonly understood

[retiredguy123]

Originally Posted by CoachKandSportsguy

LOL! um a bit ignorant for a sweeping generalization .. . . .

The "rates" are set by the doctor's office such that the blend of expected patients, cash, medicare, health insurance, which all have negotiated rates, can keep the medical office, physician, hospital able to pay its bills and stay in business.

A medical office, doctor, can not remain in business if the only rate accepted is the medicare rate. most hospitals and doctors office need non medicare higher rates and patients to survive to stay in business. Otherwise they must rely on CMS annual reimbursements for improvements to stay in business. Small hospitals and medical practices going out of business is very common, because they can't get sufficient revenue mixes to overcome their fixed expenses. hospitals also have different CMS designations, based upon size and area for reimbursements.

As far as the billing accounting goes, that is acceptable accounting practice to
bill the office rate, and then to write off the difference between insurance and the invoiced amount to the balance sheet account "Allowance for doubtful accounts"

The technical accounting here for taxable income is
$5,000 invoice = credit Revenue and debit Accounts Receivable.
$3,000 Received = Debit Cash and credit Account Receivable
$2,000 write off = Debit Write offs and credit Allowance for Doubtful accounts

Taxable Revenue = 3,000

Service accounting != <> does not equal product accounting.

Simple product accounting = Widget Sold Revenue - Widget Cost = Widget Gross Margin / Gross Profit very strong linear relationship - office expenses = operating income

Service Accounting is big bucket accounting with a weak linear relationship

Total Revenue bucket from different sources - total office expenses bucket = operating income. The biggest office expense after the doctors is EMRs and billing.

The big difference is that the customer insurance reimbursement rate varies based upon the customer's insurance, but the actual total activity labor and office expense doesn't change. If its a shot, that's pretty straight forward standard cost, but if all the business done are shots, that won't be enough revenue to pay for the fixed expenses. . if its a procedure with time billing, then the time varies but the cost of office has not changed. Insurance generally pays for a procedural rate, not the actual time and material individual rate.

That's also why there are clinics, which are minimal annual cost locations which do mostly simple stuff, and try to keep all expenses to a minimum so the billable rates can be low enough and still survive.

Wife's cousin had a knee replacement, she has medicare and a full supplemental plan. The office still required a credit card with a minimum $10,000 limit to charge any cost which wasn't covered by the insurance companies. no write offs given there!

Have spent most of my finance career with service accounting with several different types of service accounting methods. . so its not always as simple as widget accounting which is more commonly understood

LOL. My post applies to any business. Routinely charging a higher price for someone who is insured vs someone who is not insured, based solely on their insured status, is unethical. My opinion.

However, I hope you are not suggesting that everything done in medical billing is ethical, or even legal.

[DAVES]

Originally Posted by retiredguy123

No. The doctor must pay taxes on the actual income earned minus his actual expenses. He cannot deduct potential income that he doesn't collect. One reason for charging more than he can collect from Medicare is that he can charge cash clients the higher rate and claim that is his retail rate.

Having been in my own business, you are right. A rude shock someone owes you money and they go out of business, you cannot even take the income NOT PAID as a tax deduction.

So many POSTS are simply GOSSIP. A doctor. Imagine insurance tells you what you can charge. They figure 4 patients per hour. That is 15 minutes. Polite-you say hello. Used ??
1/3 of the time. Making life and death decisions. Real fear of being sued.

ASIDE- Stuff like blood tests. You can look it up insurance pays $$$$ lab informs you it is not covered and YOU owe like 50% more than insurance would have paid. FUN ask em why you who pays for insurance should pay more than insurance would pay. I'm now on Medicare so that question no longer applies. Dealing with Uncle Sam- FUN? NOPE

[DAVES]

Originally Posted by CoachKandSportsguy

LOL! um a bit ignorant for a sweeping generalization .. . . .

The "rates" are set by the doctor's office such that the blend of expected patients, cash, medicare, health insurance, which all have negotiated rates, can keep the medical office, physician, hospital able to pay its bills and stay in business.

A medical office, doctor, can not remain in business if the only rate accepted is the medicare rate. most hospitals and doctors office need non medicare higher rates and patients to survive to stay in business. Otherwise they must rely on CMS annual reimbursements for improvements to stay in business. Small hospitals and medical practices going out of business is very common, because they can't get sufficient revenue mixes to overcome their fixed expenses. hospitals also have different CMS designations, based upon size and area for reimbursements.

As far as the billing accounting goes, that is acceptable accounting practice to
bill the office rate, and then to write off the difference between insurance and the invoiced amount to the balance sheet account "Allowance for doubtful accounts"

The technical accounting here for taxable income is
$5,000 invoice = credit Revenue and debit Accounts Receivable.
$3,000 Received = Debit Cash and credit Account Receivable
$2,000 write off = Debit Write offs and credit Allowance for Doubtful accounts

Taxable Revenue = 3,000

Service accounting != <> does not equal product accounting.

Simple product accounting = Widget Sold Revenue - Widget Cost = Widget Gross Margin / Gross Profit very strong linear relationship - office expenses = operating income

Service Accounting is big bucket accounting with a weak linear relationship

Total Revenue bucket from different sources - total office expenses bucket = operating income. The biggest office expense after the doctors is EMRs and billing.

The big difference is that the customer insurance reimbursement rate varies based upon the customer's insurance, but the actual total activity labor and office expense doesn't change. If its a shot, that's pretty straight forward standard cost, but if all the business done are shots, that won't be enough revenue to pay for the fixed expenses. . if its a procedure with time billing, then the time varies but the cost of office has not changed. Insurance generally pays for a procedural rate, not the actual time and material individual rate.

That's also why there are clinics, which are minimal annual cost locations which do mostly simple stuff, and try to keep all expenses to a minimum so the billable rates can be low enough and still survive.

Wife's cousin had a knee replacement, she has medicare and a full supplemental plan. The office still required a credit card with a minimum $10,000 limit to charge any cost which wasn't covered by the insurance companies. no write offs given there!

Have spent most of my finance career with service accounting with several different types of service accounting methods. . so its not always as simple as widget accounting which is more commonly understood

Accounting. ETHICS. People all people spin shat they do/did as being ethical. Only need read POSTS. TAXES-others should pay more than I do. REASON simple I do not what to pay as much as I do. Nothing NEW.