Healthcare cost reimbursement: Who pays and how much?
HospitalCharge.com provides medical diagnoses and procedures costs comparison
Medicare: The hospital or provider's average submitted charge amount is different from what Medicare will pay. For example, if a procedure charge is $4000.00, Medicare may pay $650.
Private Health Insurance: Your private insurance company negotiates lower rates with providers so that your costs will be lower than the average submitted charge.
No Insurance: If you are not insured, the average submitted charge amount may not be the actual cost to the patient in the event that the hospital or provider has policies in place to make costs more affordable.
When discussing hospital pricing, understanding a common set of definitions is important. Cost, charge, and price are not interchangeable terms:
Cost varies by the party (the consumer insurer, health care provider) incurring the expense.
Charge is the dollar amount a health care provider (your hospital, physician or clinic) sets for services rendered before negotiating any discounts with a payer (the insurance company).
Price is the total amount a health care provider expects to be paid by payers and patients for health care.
*Definitions provided by the Healthcare Financial Management Association, April 2014.