The crazy bookkeeping of medical relations between the provider and the patient...

If you are on Medicare you may have noticed the outrageous difference between the cost charged to the patient and the amount Medicare will pay.

You may have a procedure that wholesales for say $250. The Hospital or medical billing center, keeps it on record as $250. Medicare says it will pay $36.50 for that particular procedure.

Now the hospital or medical billing center must know what Medicare will pay up front. They should know what to do in order to make a profit and still continue to service the needs of the community.

I do know this, before I became eligible for Medicare, my deductible was what the Insurance didn't pay.

My conclusion is, as an accountant, that the hospital, or doctor or wellness clinic all charge a larger fee than they have to in order to make up, in some cases, the minuscule amount of money Medicare pays for a procedure or treatment. For instance, I had a pain blocking procedure that was listed on my bill as over $3,500. Medicare was willing to pay about $275.

The only thing I can say is the whole costing throughout the entire medical system is out of whack due to such wide variations in payments expected and charges levied. You have what Medicare pays, the insurance companies pay, the amount patients are expected to pay and then the amounts the hospitals write off for treating emergency room visits by indigent or insuranceless patients.

I know I am rambling here but this stuff has been running around my brain for about six years or so now ever since I started to descend into the world of being covered by insurance and Medicare.

One more thing; because of this out of whack payment/reimbursement system, I wouldn't trust any financial information tossed out by the Health Care industry saying they are losing money. Unless they throw open their books, there is no way to determine how much of those losses, say from low Medicare payments, are in their to mask the profits in other areas of the hospital.

Here in Cleveland, the "world famous" Cleveland Clinic has started to have only one billing area for all procedures and medical personal. I get one bill from Cleveland Clinic Affiliated hospitals. That bill includes the doctors, the therapists, the tests and the room fees. All of it is charged and billed by one center. The doctors work for the Clinic, the specialists work for the clinic, the medical technicians work for the clinic. This to me is how the whole system should be operated.

When I was in the hospital for over 30 days back in 2004, I received bills from several doctors, from radiologists, from technician contractors, food service, room fees, television rental, supplies. The hospital, at the time, was only one of about twenty or so billing centers. The last time I was in back in 2008, I was charged one bill for my entire stay, one from my primary care doctor and one from the home medical staff I needed because I was discharged and did my own IV's. It was the same hospital from 2004,, but they had fully integrated into the cleveland clinic system in 2008.

The system will continue to be out of whack until more medical billing centers are consolidated. This really cuts down the paper work involved and makes it a whole lot easier for Medicare, insurance companies, patients, hospitals and other wellness or care facilities and, of course, doctors and specialists.

BTW, my fever is fast approaching 101 so if I sound slightly or even heavily incoherent, you will understand. I could be facing another stay in the hospital within the nexst few days. Wish me luck. I do know I won't have to care about the billing because I will, if I go in, be at a Cleveland Clinic Hopsital.

You sound quite coherent to me...

This paragraph says it all for me: And I agree completely.

Here in Cleveland, the "world famous" Cleveland Clinic has started to have only one billing area for all procedures and medical personal. I get one bill from Cleveland Clinic Affiliated hospitals. That bill includes the doctors, the therapists, the tests and the room fees. All of it is charged and billed by one center. The doctors work for the Clinic, the specialists work for the clinic, the medical technicians work for the clinic. This to me is how the whole system should be operated.

Be well!

K&R

I hope your fever comes down!!

I have respiratory issues that occasionally end me up in hospital. I do not want go near as my local hospital is being over run with panicked flu patients.

For the exact reason you stated. They deliver some of the best care in the country at some of the lowest costs.

http://obama-mamas.com/blog/?p=325

No worries about billing, they get a great salary and are usually there only about 50 hrs a week.

How the heck can we price anything and determine the cost of any program of health care - if there is no pricing standard?

I have wondered about this many times myself.

"I wouldn't trust any financial information tossed out by the Health Care industry saying they are losing money. Unless they throw open their books, there is no way to determine how much of those losses, say from low Medicare payments, are in their to mask the profits in other areas of the hospital."

:kick: & REC'D!

I attend tons of appointments with both parents, in their 80's, sometimes both are in hospital at same time.

The communication between providers/labs/hospitals is ABYSMAL!

That their meds and history aren't on some shared database is RIDICULOUS!

I've been witness to countless errors in dosages and treatments.

If I wasn't there during consultations and in charge of their meds, they would both be dead.

Get well soon! :hug:

It doesn't have to be 24/7 but you need to keep an eye out for them.

When I was in for those 35 days in 2004, my sister made sure that I was getting the right care. she is a Nurse Practitioner and she is married to a doctor. They took care of me while I was in a drug induced coma.

Good part, I missed Reagans funeral.

Best part, I was all over the place in my mind.

My conclusion is, as an accountant, that the hospital, or doctor or wellness clinic all charge a larger fee than they have to in order to make up, in some cases, the minuscule amount of money Medicare pays for a procedure or treatment.

Since older people use far more health care per capita than the population average, and since many Medicaid patients do also, the primary reason for high medical costs for privately insured or uninsured persons is not that medical costs themselves are rising. In many cases, they haven't increased at all on an inflation-adjusted basis, or have fallen. It is to pay for a large portion of the medical care delivered under government insurance programs.

That is why Medicare for all won't work unless Medicare is reformed to pay doctors and hospitals enough to deliver the services. And that's why Medicare for all would cost us approximately 17.5-20% of payroll.

It's also why none of the current Dem plans make any sense whatsoever, nor does having a "public option". They will not lower insurance costs. Nothing will lower insurance costs but paying more for Medicare and Medicaid patients.

The cost a private insurer or an uninsured person is charged for treatment is mostly a function of the patient mix at the hospital or doctor's office. A friend of mine who has low income and medical problems is uninsured. His doctor wanted him to get a chest X-ray, because he thinks he has viral pneumonia from H1N1. My friend called around (he's in CA). The lowest hospital charge was $2,500. I told him to try a cash clinic. $200.

That's the reality of it.

You can go on line and find out what Medicare will pay for a procedure. Ask your doctor what procedure code will be used to bill Medicare.

The doctor's work is covered under Part B. Hospital inpatient days are Part A.

If you have Part B coverage you can assign it over to the doctor. The doctor has to agree to accept what Medicare will pay for a procedure. The difference between what the doctor charges and what Medicare pays can be billed to you and many times it isn't. Medicare tell the doctor what he can charge for a procedure. I think it is a percentage over what Medicare pays him.

If you are a patient in a hospital, the hospital bills medicare a per diem rate. Medicare deducts from that rate some amounts and pays the hospital the difference. You can see all of this on your EOB when you get it.

Since you are an accountant you should understand this. The revenue that is booked is not the doctor's charge amount or his billing rate. The revenue is the cash that comes as a result of billing an insurance company or Medicare, Medical (in CA) or paid by the patient. Revenue is booked on a cash basis. The billing rate means nothing.

If you booked the billing rate as revenue you would have to offset it by the noncollectable amount. The difference between what is billed and what you would expect to get paid. That would be an estimate based on past history. Then when the cash comes in you would book the cash and the difference between what you recorded as a receivable and what you actually got either plus or minus. In the end the Revenue finally booked is the amount of cash you received and not the billing rate.

Medical institutions and doctors contract with insurance companies at some negotiated rate. It is usually based on Medicare rates. It is either some percentage above or below what Medicare pays for the procedure. All insurance companies have a reimbursement schedule as does Medicare that comes on a CD that you load into your computer system. You can use that schedule to estimate your receivables at any time but you can't get an exact figure because there may be denials due to incorrect coding or the patient is not really covered by the insurance they think they have.

Any time you have to re-bill you are incurring more expense and in the case of Medicare you get penalized for lateness. Every quarter you are late in submitting a claim Medicare deducts some amount.

In a medical clinics doctors who are employees generally get paid at some percentage of the cash income they generate. 45% is a good estimate. The rest of the cash goes to pay for medications, facility costs, supplies, nurses and admin and other salaries.

The amount of return on any procedure can vary depending on how efficient the employees are. From the time you are checked in to the time you are seen by the doctor and his writing of notes, the coding of the claim by the certified coder and the filing of the claim to the insurance company and the banking of the cash, there are tasks that if done right insures the maximum return on the procedure preformed. Any inefficiencies in the process and there are added costs such as re-billing claims and the reduction in reimbursement.

A single payer system or a public option would not change any of this since the reimbursement for a procedure will most likely be based on Medicare reimbursement rates.



on edit. In clinics different departments make different amount of profits. Surgery centers make the most profit usually and the surgeons are the highest paid. Surgery has the highest reimbursement rates which are closer the the billing rate than are other procedures. Opthalmology can make money as does radiology and labs if managed right. Urgent care, family practice usually lose money. It is like any business. Doctors do not bill you something in order to make a profit. The cash that comes in from the payer less the costs to do the procedures and to pay for indirect costs is profit and it isn't much. If a doctor gets paid 50 cents on the dollar that comes in the rest the costs have to be paid from the other 50 cents. That's all the other employee salaries and taxes, all direct costs such as nurses, supplies, room rent, utilities. and all indirect costs such as billing and accounting and housekeeping and such. If the doctor gets an increase that is less money for the other costs that do not go down just because there is less money to cover them.

These days for a clinic to make any money, they have to see as many patients as they can in a day. That results in the doctor barely seeing you at all and the proscribing of medications rather than any other kind of therapy.

The ones who make money off the health care system are the pharmaceutical companies and the insurance companies not the clinics and hospitals.

By the way, most nurses and doctors want to give the best care they can but they are limited by the amount of reimbursement they get.

If you want better care, reduce the costs of medications and medical supplies and reimburse at a higher rate than Medicare.

I was talking about my experience as a patient and that the Cleveland Clinic method of operating lowered the number of profit centers in the system because all of the procedure processing was done from one department and not run through several different companies working inside a hospital. The medicare billing is different then.

I'm on the side of the doctors, well most of them. I know full well that the money being sent out as waste comes mostly from medical device rental and prescribed medicine.

You might have noticed that I compared the process from before I had Medicare and now that I have Medicare as a secondary insurance. I also made it pretty clear that the old method of every profit center, ie doc's, specialists, procedure, etc., was confusing to the patient while the new method of having one blanket company operating without the individual contractors operating within their walls.

Granted, my accounting has been mainly focused on taxes and small business accounts, I never worked at a large institution but even with my little experience with medical billing practices I can see that the old way of billing was adding undo bureaucratic nonsense to the system while the new Cleveland Clinic model is much more streamlined and far less confusing to people whether they are on Medicare or private insurance.

The Clinic pays doctors, all doctors, a salary that is not based on how many procedures they prescribe or running as many patients in and out of their office. The Cleveland Clinic is not like other Clinics because it is a full service hospital.