Point of Service Direct (Cash) Claim Payment

By Bill Rusteberg

I couldn’t resist publishing this in a moment of insanity this afternoon…………it’s therapy that’s good for me………….

The redacted summary report shown below is of a recent claim incurred at a hospital in Texas which historically has refused to work with Reference Based Pricing plans.

Although this hospital has offered our clients direct reimbursement agreements in the past (their best offer was 150% MC in-patient and 50% off billed charges for out-patient services), we declined because we were able to determine their offer was the equivalent of 350% and more of MC for outpatient encounters

We would have accepted 150% MC across the board as that is about what we are paying when you add in the RBP vendor fee/s but don’t tell anyone please. Let’s just keep that between us. 

So the hospital decided to view our members as Cash Pay. We have learned to love that. We wish more hospitals would reject Reference Based Pricing plans and treat all our members as cash pay patients.

(To BUCA reps. reading this – keep bashing Reference Based Pricing plans as loud and often as you can please! It’s good for business and it’s good for Reference Based Pricing plans).

Now, instead of paying what we normally pay hospitals under Reference Based Pricing plans (120% MC), we are consistently paying them less than Medicare rates. The savings are so great we are waiving all patient responsibility.

So just imagine; no managed care contract in place, no surprise bills, no balance bills, no patient responsibility, no claims to file and chase, and savings of more than 50% off normal BUCA pricing.

So instead of accepting our offer of 150% MC for all services, they made a planetary decision to purposely accept less than Medicare while grinning at the same time.

The first line item below is what we paid the hospital for an out-patient surgical procedure last week. The next two line items are physician payments. The claim management fee is listed at $1,850 (no B.S. % of savings charged) bringing the total aggregate cost to the plan of 123% of Medicare.

Sure beats managed care plans, especially in this particular area of Texas where average BUCA hospital claim settlement for outpatient services average between 350% to 500% of Medicare. (Trust me, we have the data).

Medicare Rate Cash Price % of Medicare
$  5,981.95  $      5,419.52 91%
$     842.55  $      1,249.00 148%
$     160.85  $         105.00 65%
Mgt. Fee  $      1,850.00
$  6,985.35  $      8,623.52 123%

This illustrates how crazy our health care delivery system of financing really is. It’s populated with an over abundance of Space Cadets.

In dealing with Hospital Space Cadets over the years, I’ve often wondered what planet they come from. Most, it seems, are provably not from the planet of Common Sense, Reason and Logic, at least that’s from a plan sponsor’s perspective.