In the article, Transparency And The Fallacy of Charge Masters the author exposes the fallacy of “charged based negotiations” with hospitals.
“The charge masters are totally irrational…….over time, hospitals raised charges in anticipation of negotiating discounts with private health insurance companies while maintaining their revenue streams……….Over the years, the charge masters have become more and more disconnected from reality.”
Yet third party intermediaries love charge masters. The higher charge master rates are, the higher their fees.
Negotiating hospital bills and charging fees based on a percentage of savings is a billion dollar business in the United States. It continues because payers won’t stand up and say “enough already, your fees are too high……let’s negotiate your fees to a more reasonable level, based on a flat fee per claim or a percentage applied to a universal benchmark such as Medicare!”
Editor’s Note: To pay a percentage-of-savings fee off an existing contract is insanity.