Making Sense Out of Medicare Billed Charges Nearly Impossible
OPINION -- I am on Medicare and was having an elective colonoscopy soon. Always having an interest in the distorted pricing practices of providers, I asked several questions -- How much will you be billing me for this procedure? And, how much will Medicare be paying as full reimbursement?
But, the provider’s representative was surprised that I would care about prices as Medicare as my supplemental insurance would pay 100 percent of the cost, and assumed that was all I needed to know. But I kept pressing for an answer, and here’s what I was told by their billing office.
There are three Medicare billing codes for colonoscopy that come into play: “Routine” / “Biopsy” / “Removal of polyps”
The billed charges anticipated from this provider were $1132 / $1400 / $1468 respectively. And, they are additive creating estimated billed charges of $4,000 if all procedures come into play.
Medicare will pay $393 / $488 / $509 (total $1340 or as little as $684) respectively. This means that Medicare reimbursement will fall in the range of 17 percent to 34 percent of billed charges with a Medicare discount from billed charges of 66 percent to 83 percent.
Who can be so foolish to pay billed charges or anything more than Medicare plus 10 percent.
The provider asked me to sign a financial responsibility document that offered a 40 percent discount from billed charges only if I did not have insurance.
If I did have insurance the payer’s contract governed the discount (keep in mind, there must be very few managed care agreements that are achieving a 40 percent discount from billed charges. If I was insured and without a payer contract, my payer and I would be responsible for full charges.
How many of our employers are receiving 40 percent off billed charges or only about half the discount of what providers accept as full compensation from Medicare? With the will, there is a simple path out of this mess.
Stephen Gregg is a retired hospital administrator and health plan chief of staff. He can be reached at [email protected].