Likely a silly question…
Although I consider myself to have a well-rounded education and at least some knowledge about a wide range of concepts – I am befuddled. Medical billing is something I have absolutely no knowledge / experience with (even health insurance itself is a little “fuzzy” to me). The answer to my question is probably complicated and beyond the scope of what can be explained here. Or – it might be really simple and I am just overthinking it while trying to make sense of it.
So here goes: I am currently on a Medicare advantage plan (Cigna) in AZ. I have been keeping track and paying attention to my monthly EOBs lately via Cigna’s patient portal. The reason being … I was in a car accident that was not my fault and have an accident injury attorney working on my case. Anyway, I am aware that when I am awarded my settlement – Medicare is going to want reimbursement for all the money they put out having to do with the car accident. So, I just look from time to time to see how much they have paid up to that point so I have an idea of what to expect.
I noticed, when I look at my EOB for example, a set (random) time period – it will say, for example… (just made up numbers just to show the usual pattern I see:
Billed amount: $54,789.00
What we paid: $5,984.00
What you may be billed: $85.00
Upon googling, I learned Medicaid (since also federally funded) is similar in the amount they pay vs. the amount billed.
I also read that commercial health insurance can sometimes “only get half the amount of discounts medicare/Medicaid does”. And – the context in which this statement was written – made it clear that the person writing it was upset that the discount wasn’t good enough. So, I am thinking to myself – this implies that in an almost worst case scenario …. A commercial health insurance (using the same example above):
Billed amount: $54,789.00
What we paid: $11, 934.00
What you may be billed: $85.00
How does this work??? How is it that the insurance companies get bills for a certain amount and then just can pay a tiny fraction of the bill and everyone is OK with it. How do “discounts” this big even keep up with paying the doctors, medical equipment, etc. etc. Why even send a bill out for 5-10 times the amount they expect to get paid. Why not just send the bill out with the amount that is due (which is the fundamental purpose of sending out “bills” to a person or entity).
So, if Medicare, Medicaid, and commercial insurance are all getting these outrageously discounted prices…. That begs the question – under what circumstance would some unlucky SOB (whether it be a person or entity) – get a bill for the $54,789.00…. And have to / be expected to pay … the entire $54,789.00 without granting them any type of “discounts” ..,”coupons” … “rebates” or anything other than what the actual cost of the services cost???? What am I missing here??
