Insurance Billing – Part 3 – Insurances Rates

In Part 1 of insurance billing I mentioned a scenario where fictitious LMP, Sally, billed $120 per massage and the insurance only allowed $58 to be paid out by them and the patient. Why is there a discrepancy?

Every insurance company decides what they are going to pay out for each covered service. They set rates for massages, doctors visits, vaccinations, women’s well visits. You name it, they set a rate. Healthcare providers can either contract with them and accept that rate (if they can in fact get on contract) or not accept it. In that case the cost falls to the patient.

It makes sense to protect the patient from super high charges from a healthcare provider or facility that might seek  to take advantage of a situation. However, the unfortunate side is that often the insurance rate doesn’t match even a slightly less expensive cash rate.

So if you are looking at your explanation of benefits and see numbers that don’t match the total charge, it’s because they set a rate and I must abide by it. As always feel free to call or email me and ask me to explain what something means.

Thank you!