Hospital Billed Charges Are A Joke – PPO Discounts Are Absurd

                                     “The Texas Workers Compensation Commission “found that hospital’s billed charges were basically meaningless in the current managed care environment.”

“They do not have a consistant or rational relationship to either payments accepted by hospitals or to hospital costs.”

“Hospital charges are not a valid indicator of a hospital’s cost of providing services nor what is being paid by other payers.  In rejecting a percent of (or discount from) billed charges method of reimbursement the Commission noted such a method leaves the ultimate reimbursement in control of the hospital thus defeating the statutory objective of effective cost control.”

See http://www.supreme.courts.state.tx.us/ebriefs/09/09016208.pdf

Editor’s Note: PPO discounts are applied to arbitrary billed charges. Is it not better to pay based on cost plus a reasonable margin rather than off a phantom inflated charge that is “discounted?” Over 80 Texas employers have discarded their PPO plans and now pay providers differently. They collectively believe there is a better and more equitable method to pay for health care costs. Instead of paying a PPO allowable charge  of $50,000 of a $100,000 hospital’s billed charge, they are paying $20,000 and still insuring that the hospital makes a reasonable profit. (Yes, these numbers are real). We challenge anyone to a debate on this subject. In fact, we will sponsor the debate in San Antonio at a time and place pubicly posted. Let us know if you want to participate by writing RiskManager@sbcglobal.net

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