Strange medical bill

My wife had to wear a heart monitor for a month, and transmit by phone any “events” that it recorded. It didn’t record any. Insurance did not pay the company anything, because it was within my deductible. So today we got a bill in the mail for $500. I was about to pay it when I found another paper in with the bill, where we could check off “I agree to $250 as payment in full for this service and will pay that within one month.” Or, we could check off “I agree to $250 as payment in full for this service and will pay that in two installments of $125 within two months.” Or there were some other options to extend payments as much as eight months, but none of the options added up to the original $500.

It struck me as very odd, like they were admitting the $500 was an outrageous amount, or maybe they were just assuming we would refuse to pay but would agree to a smaller amount. So they were offering to settle without even waiting for me to complain. Has anybody else seen something like this?

I wish my credit card company would send me a bill like that

The medical vodoo billing system has always been a mystery.
Medicare is the worst. My brother can never make heads of tails
out of the hospital and doctor bills that we see. It must
be some sort of accounting gymnastics that make sense to accountants
and tax people.
Where does the difference go is my question ?

And everyone wonders why I avoid doctors & have no insurance ....

Possibly the insurance company had been sent the bill so it could apply to your deductible then as they processed it and the procedure had a cap of $250 which is what the hospital billed you. My wife gets those kind of statements all the time. Another thing that bugs me about the statements from the hospital is how hard it is to figure out which appt./procedure the statement is for.

I just can't figure if there is a 90/10 plan,the bill is $1000, so the insurance pay's $300 and I'm to pay $100. Why not $30 ???

Just a guess here but they probably have poor collection rate on bills the insurance companies don't pay so they bill and inflated $500 in the hopes your insurance will cover it. This probably makes up a small percentage of the payments they receive and is where most of their profit comes from. From there they offer you discounted rate in the hopes you pay it off because of the "special offer". Basically they are using same tactics debt collectors use offering substantial discount off the principal.

$500 is the advertised rate, and it's correct as far as billing, but they usually have different amount contracted with the insurance company.

they want to keep the advertised rate high to scare people, so you always carry insurance, but always willing to negotiate that rate.

Richard S. wrote:Just a guess here but they probably have poor collection rate on bills the insurance companies don't pay so they bill and inflated $500 in the hopes your insurance will cover it. This probably makes up a small percentage of the payments they receive and is where most of their profit comes from. From there they offer you discounted rate in the hopes you pay it off because of the "special offer". Basically they are using same tactics debt collectors use offering substantial discount off the principal.

Often referred to as the Reciprocity Rule. Works just like Richard said; They offer, you say no, they agree with you and give in a little.
Human nature lends one to give a little too ... reciprocate. It might go through several cycles but that's the response they look for. Charity telemarketers use it all the time. Talk to one the next call you get and you'll be sure to pick right up on the tactic.

SMITTY wrote:And everyone wonders why I avoid doctors & have no insurance ....

I don't wonder, buddy. I just wing it too.

The insurance companies never pay full price so now some hospitals are offering "insurance rates" if you pay quickly. If they need to take you to court at some point, that's when you pay the full rate.

Recently I went to "the other hospital", the one my wife does not work at. When I got the bill it offered 20% off if paid within 5 days, 10% within 30 days. My wifes hospital doesn't offer a penny off!

The billing games will get worse. The latest game is to admit a patient for "observation status." Insurance carriers, both medicare and health insurance won't pay for this status and the patient gets stuck for the entire bill.

My wife had a partial knee replacement recently and when the bills were all totaled up came to over $30K. But the negotiated contractual price that the insurance company paid was $19K. It's called monkey math. Medical industry wants us to see that they don't make as much as they should. That's why doctors drive around in beat up old cars and live in shacks.
Tom

Poor,Poor doc's...heading to the poor house....
Any Doc's on here burning coal to save money??!!

Hospital accounting:

Aspirin, actual cost: 5 cents.

Aspirin, billed price (insurance): 2 dollars.

Agreed (Insurance) price: 1.75 dollars.

Insurance payment (after deductible): 1.25 dollars.

Profit/Loss to hospital (accounting): .75 dollars (loss).

Please send us a donation because we are loosing money to the evil insurance companies.