It’s bad enough when a tragic accident happens, or a loved one gets sick and has to have an extensive hospital stay. But after all the turmoil with family and friends, in come the bills. And in today’s world, paying medial bills is an extremely expensive proposition. I want to dedicate this article to folks that need help paying medical bills, with a focus on a singular point – negotiating with the hospital/health care organization. I do not intend to provide any links to services, companies, or government aid in paying for health care, this is a self help focused article.
America has drifted in to a price taking, lazy, “gimmie, gimmie, gimmie” nation. People do not want to work hard to earn money, and if they are able to make a little money, spend way more than they make. But enough ranting, I want to elaborate a little on what I mean when I talk about negotiating with the health care provider.
Did you know that many insurance companies, Medicare, Medicaid, and other big organization customers have pre-arranged, set rates that they pay hospitals and other health care providers? They do. I worked at a hospital before deciding to venture off on my own in the internet business and real estate investing/property management. While I was there, I was shocked to learn that some of the larger health insurance companies paid 60%, 70%, or 80% of what was billed to them. Does that make any sense? When you get a monthly bill in the mail, such as a bill for cable TV or phone service, are you allowed to pay a fraction of the bill, or the whole amount? Well obviously, the entire amount.
But you see, it is different in the health care industry. In fact, Medicare pays based on what they call a Relative Value Unit (RVU), or a fixed amount per unit. And depending on the service rendered, they will pay a certain number of RVUs. So what this means is that the health care provider is going to get a fixed payment, so there is not much incentive to go the extra mile. So the bottom line of what I am saying is this, almost every entity that pays a health care provider is paying less than full price.
So if that is true, why not pay less yourself? Armed with this knowledge, you are put in a far more likely position to negotiate with the health care provider. Why? Because the health provider knows that they will not be compensated dollar for dollar, of course they are going to raise prices to try to make their money (this statement is speculation, however with the facts presented above, I am confident it is true). I have heard of families getting as much as a 50% discount on services provided to them when there was no insurance company involved. But even if insurance pays, why not talk down the charges anyway?
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