Quality Quest for Health of Illinois
By: Dr. Gail Amundson, on December 8, 2010
Recently, Quest was asked why the charge for an MRI test (Magnetic Resonance Image) would be different from center to center.
"I'm curious why there is such a big difference in the cost of an MRI. I had one done recently billed at $4500.00. That is almost double what most other places charge. Aren't these costs regulated? I wouldn't think that one machine would be better than everyone else's."
Perhaps you have had a similar experience?
The writer's hunch was correct, the difference in price isn't because one machine is better than another.
Healthcare charges for Medicare and Medicaid are regulated. The Centers for Medicaid and Medicare Services (CMS) establishes a fee schedule (payment rate) for services provided to Medicare patients. States set their own Medicaid payment rates. It is common for these to be a percentage of what Medicare would pay. Illinois Medicaid pays about forty percent less than Medicare. Healthcare charges for other patients are not regulated. The charges can, and do, vary widely. Here's why.
Insurance companies negotiate contracts with healthcare providers to provide care for their enrollees. Contracts are re-negotiated annually or every few years. Contracted providers are referred to as 'in-network' providers. The contract sets the payment for each individual service. In this case an MRI.
Providers have a list price fee schedule. List price is often a multiple of what Medicare pays. For example, a fee schedule might be set at 300% of Medicare or three times what Medicare would pay. Insurers negotiate for a discount off the provider's fee schedule. Success for a provider means keeping their discount low. Success for insurers means getting deeper discounts.
As a general rule, bigger healthcare providers can negotiate higher prices and bigger insurance companies can negotiate deeper discounts.
The process inflates fees and discounts. The result is charges that vary by insurer and by provider. Sometimes by a lot.
The news is bad for patients who pay their own bills. Self-pay patients are often charged list price. That's more than anyone else. If you are paying your own bills, always ask for a discount, and don't be shy.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
Medicaid is a health insurance program for lower-income families and the disabled. It is paid for partly by the federal government and partly by the state in which an individual resides. The criteria for Medicaid eligibility vary by state.
Medicaid is a health insurance program for lower-income families and the disabled. It is paid for partly by the federal government and partly by the state in which an individual resides. The criteria for Medicaid eligibility vary by state.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
Medicaid is a health insurance program for lower-income families and the disabled. It is paid for partly by the federal government and partly by the state in which an individual resides. The criteria for Medicaid eligibility vary by state.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
Medicaid is a health insurance program for lower-income families and the disabled. It is paid for partly by the federal government and partly by the state in which an individual resides. The criteria for Medicaid eligibility vary by state.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
Medicare is a national health insurance program for people age 65 or older that is paid for by the federal government. Medicare has four parts. Part A helps cover the basic costs of medical care, surgery, and mental hospital care. Part B is extra insurance, and while the government pays for part of it people in the program pay insurance premiums, too. Part C is a choice to get Parts A and B through a private insurance plan. Part D helps cover prescription drug costs. Medicare is considered an entitlement program, since anyone age 65 or older is eligible, and currently covers over 40 million people in the United States.
A Provider is a professional engaged in the delivery of health services, including physicians, dentists, nurses, podiatrists, optometrists, clinical psychologists, etc. Hospitals and long-term care facilities are also Providers. The Medicare program uses the term "Provider" more narrowly, to mean participating institutions: hospitals, skilled nursing facilities, home health agencies, etc.
A Provider is a professional engaged in the delivery of health services, including physicians, dentists, nurses, podiatrists, optometrists, clinical psychologists, etc. Hospitals and long-term care facilities are also Providers. The Medicare program uses the term "Provider" more narrowly, to mean participating institutions: hospitals, skilled nursing facilities, home health agencies, etc.
A Provider is a professional engaged in the delivery of health services, including physicians, dentists, nurses, podiatrists, optometrists, clinical psychologists, etc. Hospitals and long-term care facilities are also Providers. The Medicare program uses the term "Provider" more narrowly, to mean participating institutions: hospitals, skilled nursing facilities, home health agencies, etc.
