Part of a continuing series………..(See previous two posts)
“Reasonable charges for inpatient and outpatient facilities generally equal twice a facility’s cost as reported by the facility to CMS….”
A document left unattended in a brown paper bag in front of our corporate offices (see previous post) details inner workings of a BUCA’s out-of-network pricing strategies.
This document outlines two reimbursement methodologies: 1) PPO network reimbursement pricing, 2) Non-network pricing including facility claim review and itemized bill review.
According to the document, the later (#2) “provides reasonable charge allowance review for most inpatient and outpatient facility claims where a PPO contracted rate is not available. The reasonable charge allowance is based on a methodology determined by us, which may change from time to time. Reasonable charges for inpatient and outpatient facilities generally equal twice a facility’s cost as reported by the facility to CMS, or if information is not available for a specific facility, we use the state average facility cost information.”
SUMMARY: This BUCA, in some cases, pays Cost +100%. At that rate balance billing will be extremely rare.
How many businesses do you know that earn a markup this high, and still remains in business?