Carriers Fear Cost Plus – Why?

There is no question that health insurance companies rely on secretive agreements with hospitals to establish insurance payment rates. These agreements are well guarded. Attempts to gain access to review these contracts takes perserverence and knowing the right people.  But it can be done if one is willing to spend the time and energy necessary to crack the Code of Silence.

So why are carriers reacting as they are to the growing phenonemon of cost-plus health plans that pay hospitals their cost as reported to CMS plus a 12% profit margin?  Carriers, it seems, are at their wits ends in fighting this “corrupt” method of paying hospitals. Career sales representatives for various health insurance carriers are  seemingly beyond psychiatric redemption in contolling their uncommon angst and desperation in losing business to the cost-plus bandwagon in Texas.

It now appears that some carriers are joining with hospitals to fight the cost-plus plague.

One would wonder why that is. Dont health insurance companies want to offer the lowest cost health care to their customers that are paying them millions of dollars? After all, who do these carriers represent; their loyal premium paying customers or profit driven hospitals?

Do secretive managed care contracts have anything to do with this?

We have reviewed various carrier contracts with hospitals over the past year. We know what is in them. Do you?