Mike VanOuse, writing a column for the Lafayette Journal & Courier, has a good column complaining about the lack of transparency in pricing medical services and insuring medical services. When he buys a loaf of bread, it says $1.49, he turns over $2, gets $0.51 back; end of story. Nobody telling him being vague about the price and telling him they’ll work with him based on income or being quoted one price, paying it, and then getting hounded by collectors after the provider decides whether or not they like what the insurance company’s done.
The first thing we need, particularly in the case of non-emergency medical procedures and services, is price transparency. What does it cost? The Indiana Supreme Court has recently decided that when you sign up for medical services; unless your contract says something different; you might well be bound by the prices in the hospital’s chargemaster. This is notwithstanding the fact that these chargemaster prices are largely works of fiction and very probably won’t be shared with you just for asking.
As has often been discussed, chargemasters have little relation to average costs, marginal costs, any kind of cost calculation. They are based on data that is often purchased by large data and information aggregators.
Not only is the data not shared, but it is often proprietary and confidential.
One lesson that can be drawn is the need to purchase health insurance that has a network feature with negotiated rates so one is not balanced billed.
For me, it comes up in the context of tort claims. The jury is instructed to award the “reasonable” cost of medical services made necessary by the injury. There is a rule of evidence that creates a rebuttable presumption that the amount billed on a statement is “reasonable.”
That’s no big deal where the gap between what’s billed and what’s paid is close; but when the former is quadruple the latter, it becomes an issue — compounded by the fact that the value of injuries are often, at least informally, valued as some sort of multiple of the actual medical costs.
Dog,
I have seen that rule of evidence. It is a rule of convenience more than a rational rule, especially in the case of hospital bills, but it does make collection matters simpler for the plaintiff.
Your other point is really interesting. I did a a small personal injury claim for a friend of a friend. She had a about 800 in billed charges from the ED. The Medicaid reimbursement was about $180, 23% of the billed charges.
I vote for Masson to replace VanOuse at the J &C.
VanOuse is almost never worth the time reading.