“Doctors, along with all other heath care providers, virtually always bill insurance companies far more than what we would expect in payments. Why? The simple answer is that we usually don’t know what to expect,” writes Dr. David Belk, a California internist who researches health costs. “Insurance companies will always pay what ever a medical provider bills up to the maximum amount they’re willing to pay for any service. So, if a doctor bills $100 for an office visit, and the insurance company is willing to pay $75, the doctor will get $75. If the doctor bills only $60 for that office visit then $60 is all he’ll receive. There is absolutely no penalty in health care for over billing, but any medical provider who under bills will short change themselves. This is why billing charges have exploded by so much in health care. This payment system is far too confusing for any health care provider to really understand, so the best strategy is to bill high for every service then take what they give us. This creates a huge problem for anyone who is uninsured, but an even bigger problem for people who have insurance and had their claim denied for any reason. The uninsured will be forced to negotiate on their own behalf against billing charges that might be many times the value of a medical service. This puts the uninsured at a severe disadvantage. A person who uses their insurance, but has their claim denied is almost always expected to pay the full bill, though.” Other highlights: Blue Shield of California (and other insurers) undercuts Medicare; doctors don’t negotiate with insurers; HMO’s actually pay a lot to some providers. David Belk, “Office Billing,” True Cost of Health Care.
Jeanne Pinder is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded... More by Jeanne Pinder