Funny you guys are talking about this. I was talking to my mom about it last weekend. She works for one of the major insurance companies. We were talking about how hospitals/doctors are signing contracts with the insurance companies so the insurance companies get better rates and docs/hospitals are assured a good base. Apparently back in the good old days, hospitals could charge whatever they wanted and the insurance company would pay it...all of it. Same for docs. Now, the insurance companies don't have the money to do that. Why that happened I'm not too sure.
Now the hospitals/docs can still charge whatever they want, but they only get the set rate for signing the contract. So you can charge $200 for an office visit, but you're only gonna get $60. The patient also sufferes a bit. If you go to an out of contract hospital, the insurance company is going to get you moved ASAP. You might not get the best doc for the procedure/surgery, etc, because they may not be in contract. Sure you can still do it, but you're going to end up paying ~80% of the bill and you aren't going to get to pay the $60 fee. You'll be paying the $200 fee.
The insurance companies got this ingenius idea from Medicare. We can also thank Medicare for those great little ICD-9 codes that make our work a pain in the butt. It seems like insurance companies are making off like bandits (the company my mom works for only make ~2 billion instead of the 4 billion it made during the late 90s). Docs aren't making the money they used to, and if you've noticed, we're down a significant number of hospitals in this country since the 80s because they couldn't afford to stay open.
Looks like we're in a crisis folks! and it's not likely to be resolved anytime soon. If left to the government alone, (like the malpractice crisis) we're gonna be in trouble. If you're looking for money, better work it Anna Nicole style and marry an old guy who invested well.
lindyloohoo