Hospital Objection #2


Negotiating fees with hospitals is a tough business. It’s like negotiating with a new car dealership for that $500 left front headlight on your new 2011 Chevy truck that you busted trying to run down a family of buzzards on FM 1427 on an idle Saturday afternoon.

Some Texas employers have adopted a Cost Plus approach to reimbursing hospitals and other facilities. Using a public data base ( to find each hospital’s cost basis as they report annually to CMS, these employers pay each hospital’s cost plus a 12% margin.

When asked if they will accept a Cost Plus reimbursement model, all hospital administrators we have met with offer:

Objection #2 – “No, your cost data is old, dated, and not accurate.”

Answer – “But, the data is this year’s reporting to CMS, to which you have attested to under penalty of sanctions. Are you saying you lied in your report to CMS as to your cost basis?”

Objection #2 – “No, or course not. Let me clarify – our costs have increased since we last reported. And, the CMS reporting does not consider our ancillary services like our at-home nursing subsidary, or our private dining club for senior citizens, or our transportation services to wheel in those lucrative Medicare and Medicaid patients from area nursing homes, or our hospice center. We are actually losing money on those services. So you see, not only is your data dated, it is incomplete.”

Answer – Ok, so you are not against the concept, you are simply saying our information is not credible. How should we proceed with this conversation?

Objection #2 – “How about paying us 65% of billed charges?”

Answer – Can we have a copy of your Charge Master?

Objection #2 – “Are you insane?”