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Awards
"scam" called "re-pricing." If, for example, a hospital generates a
$100,000 bill, insurance companies will claim credit for negotiating the
payment all the way down to $20,000, says Dr. Smith. "And then they
ride off on their white horse and the employer group is so thankful to
be affiliated with that insurance company with all this muscle." But,
he says, the employer group is then charged a 're-pricing' fee for its
work — typically 28% or 30% of the $80,000 the insurer claims to have
saved.
"So when you think about it, the last place an insurance company
wants to deal with is one that is promoting and advertising reasonable
pricing, because then they lose out on their re-pricing opportunities," he
says. "They're actually incentivized to seek out the most gigantic bills
they can find."
And the hospital in that scenario makes out on the deal, too, says Dr.
Smith. "[They] want to generate gigantic bills, so they can claim that the
$80,000 they were not paid was charitable care and is a bad debt they
can write off as a loss. That helps them maintain their fiction of 'not-forprofit' status. Then they throw that [theoretical $80,000 loss] into their
uncompensated care equation and get a kickback from the taxpayer.
"There are so many scams like that in health care. We didn't understand why being cheaper and better — why insurance carriers didn't
find that attractive. That was the missing puzzle piece that really was
a light on the way health care works.
Destination Oklahoma City
The way healthcare works at the surgery center is giving rise to a phenomenon Dr. Smith calls medical tourism. People from all over the
United States, and beyond, are finding the center's prices online and
realizing it's less expensive to travel there, have their procedures done
— and maybe even stick around for a few days — than it is to have
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O U T PAT I E N T S U R G E R Y M A G A Z I N E O N L I N E | S E P T E M B E R 2013
