Hospital Billed Charges Versus Cost

We have several clients who have decided to take control of their health care spending by reimbursing hospitals on a cost-plus basis rather than rely on PPO discounts off billed charges.

Here are a few recent examples:

                                Billed Charges                             Plan Payment

1.                             $59,248.72                                       $11,034.84

2.                             $ 7,682.20                                        $     865.02

3.                             $25,245.63                                       $  6,864.73

4.                           $443,076.26                                      $116,086.39

Under ERISA a Plan Fiduciary must pay only what is fair and reasonable. Fiduciary liability is transfered to a third party who handles claim appeals and provides defense in Federal Court. An insurance policy indemifies the employer.