Medicare Reimbursement

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Apr 25, 2008
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This is directly from my hospital data. Comes straight from billing.

Metro area >1 million people

MRI Brain +/- contrast
total charge 2,500 Avg. Insurance pays: 1900 Medicare pays: 621

CT Abdomen +/- contrast
total charge 750 Avg Insurance pays 600 Medicare pays: 310

CT Pelvis + contrast
total charge 750 Avg Insurance pays: 600 Medicare pays: 310

I am not totally sure whether the CT Abdomen and pelvis are exactly additive, (i.e. $1500 when done together)

I posted the above in another post. How does medicare have the ability to undercut prices so much. I assume that most hospitals must still make a profit off of medicare that makes it worth their while. For teaching hospitals, perhaps part of that is funding for residents. But for private hospitals, I am not sure.

I know that for outpatient providers, a lot don't take new medicare patients. I can only assume that for these providers, they are either losing money on these patients, or not making much.

Accreditation is not tied to taking Medicare patients is it?

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No, at this point licensure or facility privileges are not tied to MC participation -- how long this will remain the case is a matter of debate. MC, on average, pays 80% of private insurance rates; the figures you quote are out of line with the norm. In some areas (predominantly areas with high HMO penetration, fragmented provider pool, and high provider density) private payor rates are more in line with MC. There is no doubt that MC represents low margin work; this is one of the reasons why those of us more intimately involved with the business side of medicine worry significantly over the healthcare financing "reform" that is being tossed about. Some services pay above what they probably should, while a large number are undercompensated. If, in sum, it balances out everyone is happy; when it does not, beneficiary care is adversely impacted and no one wins.
It's interesting that Medicare can't negotiate drug prices for Part D though. Thanks, Pharma lobbyists.