Why do doctors charge less if you do not have insurance?

Question

Some doctors charge a person with no insurance or on medicare a less rate than they bill the insurance company. If they billed an insurance company the discounted rate, wouldnt this help lower insurance rates? Even the discounted rate they are making money

Answer 1

Doctors can charge a cash-paying patient a discount because it costs them less to collect the money. There's no filing of claims, waiting for them to be processed and paid - without complications, that takes 4-6 weeks or more. If by cutting a cash-paying patient a break, they collect the money right then and there in full - there's no work involved - no billing the patient, or chasing for the money.

As for what to bill the insurance - doctors in theory can bill an insurance whatever they want, but they're ONLY getting the contracted rate, not a penny more. And if a procedure that's performed isn't covered by contract - too bad, so sad - that's a loss. The average discounted rate from an insurance in regards to the amount billed from my office is fifty cents on the dollar. I don't know, but I take it that means the doctors I work for have to work twice as hard.

To lower insurance rates - people need to stop abusing the system. Patients and doctors BOTH are guilty of this. Patients for rushing to the ER or any specialist for every burp and fart and then insisting on every test under the sun and then prescriptions for it - and idiot doctors for doing this! Many people tend to "doctor shop" - meaning, if they don't like that Dr. A tells them, they go see Dr. B, Dr. C, and so on. OR they run to the ER for everything. I know of someone who went to the ER because her daughter had a heart murmur and she wanted to know more about it. Then she couldn't understand why her insurance wouldn't pay for the ER visit stating it wasn't medically necessary. I believe if you go to the ER, you'd better have a limb hanging off or something equally serious - NOT to do something your primary doctor can take care of. *THOSE* are major causes of high insurance rates. Don't EVEN get me started on the people who make six figures a year and get Medicaid!

Answer 2

There are several theories to answer this question, but personally I feel this sums it up the best.

Often a person without health insurance does not have the means to buy a policy, therefore they wouldn't have the money to pay an increased premium for medical services. If doctors, hospitals, etc. bill the large amounts to an uninsured person, often is the case that the bill will not be paid and will end up being a "write off" for the organization, however, the organization wants to keep that to a minimum, so there are some charities and "goodwill" grants that uninsured people can apply for to help with their bills.

Now, to those with health insurance.... the organization providing service has an agreement with insurance providers saying, we'll bill this, you have agreed to pay this amount, and we'll go ahead and accept it... .which is often at a higher rate than a "Selfpay" or uninsured patient.

And yes, if the insurance company was billed a discounted rate healthcare cost would go down, however, it is a political debate. In my opinion there are several common sense solutions to many of our problems, such as healthcare reform, but if we resolve these problems what do we need policiticians for.. they would have nothing to argue about and promise to fix. One is in bed with the other... and as long as we acknowledge a problem and promise to find a solution then they are seen as do-gooders and ambassadors of goodwill.

There is an ever growing gap between the haves and have nots, and that will continue .. as is evident in something as simple as the cost of and availability of health insurance.

Answer 3

In some cases this is true, but not always.

In general, when doctors offer a discounted rate to those without insurance, it's typically ONLY if they pay in full at the time of service.

There's a simple reason for that. If they pay up front, the doctor's office doesn't have to go through the billing process (which is quite expensive and is typically handled by a third-party billing company.) There's also no question that they'll have to wait for the money, or that it will have to go into collections.

Waiting for the money is status quo when you bill insurance companies. So, in essence, it's a cash-flow nightmare. They bill a negotiated rate to an insurance company because they have to in order to be part of a network; it's a contractual agreement.

If you don't have insurance and you can't afford to pay in full at the time of service, let me assure you, the discounts no longer apply. In fact, you'll pay the highest rates of anyone, because doctors know that they're likely to have to send the account to collections. Collection agencies pay $.10 on each dollar for the accounts that they buy. So, knowing this going in, doctors pad the bills to absorb the costs. (Think about it... would you bill someone the same rate as someone who is paying cash if you knew that you'd have to wait 90-120 days to get 10% of your money?)

This is also why consumer-driven health care (with options like high-deductible plans and Health Savings Accounts) is the best way to drive down costs. First, you pay less for premiums. Second, you can get those discounted rates for paying up front if you use the money from your HSA (and most of them even have a debit card associated with them, so you don't have to pay for the visit up front and get reimbursed.)

Answer 4

The rates insurance companies pay to doctors (or in your case, chiropractors) are predetermined by the insurance company. If the chiropractor charges you less than what the insurance company pays then consider yourself lucky. Chances are the chiropractor's office does this to maximize income. They assume that if you don't have insurance you wouldn't be able to afford the $140 massage so they picked a price of $60 to appeal to uninsured people. And for not seeing the actual chiropractor - do you see the actual dentist when you get your teeth cleaned? Usually it's just an assistant, just like at the chiropractor.

Answer 5

I would recommend you to visit this website where onel can compare rates from different companies: http://COVERAGE-FINDER.NET/index.html?src=2YAbom12puarC

RE :Why do doctors charge less if you do not have insurance?
Some doctors charge a person with no insurance or on medicare a less rate than they bill the insurance company. If they billed an insurance company the discounted rate, wouldnt this help lower insurance rates? Even the discounted rate they are making money
Follow 12 answers

Answer 6

It's the paperwork involved to collect on Veterans, Medicaid, or private insurance or even no insurance at all. The only way a doctor can keep up is to use billing software. What you say is somewhat true, however the doctor might turn you over to a PA or a nurse to write up your diagnosis. I've had them give me salesman samples out of their closet for medication. However, in the clinical/hospital setting the rates do get an little closer to similarities.

I've had pretty worthless employer-provided insurance, good only at one university clinic and I've had no insurance at a Minor Emergency Clinic. The university clinic seemed to be the most expensive treatment I ever received.

Answer 7

I have seen doctors give people with low income and no insurance a discounted rate just because they're trying to be helpful. My sister had to have emergency laser eye surgery for a detached retina last year. Without the surgery, she was going to lose her eyesight. The ophthalmologist reduced his fee by about half when he found out she had no insurance and was living on a limited income.

Not all doctors are dogs.

Answer 8

Not likely. My OB/GYN had a check from an insurance company taped her her office door. It was for 27 cents. She loses money on those sorts of visits. I tend to think of the bill as their fantasy of what they'd like to be paid.

With liability insurance and all the other expenses, most doctors don't make nearly as much as people think.

Answer 9

they do this because with medicare because with medicare there is a limit on how much they will pay. I work for a chiropractor as an insurance billing clerk, and with people without insurance it is $45 and people with medicare we charge $25.65. It all depends on if the provider is in network with the insurance company which means the insurance company will write off more than if it wasn't in network, which means the patient will have to pay more.

Answer 10

When someone has insurance, the insurance company doesn't pay the full amount anyway - they pay a discounted amount, according to the "provider agreement".

I haven't ever had a doctor charge me LESS for not having insurance, it's usually MORE!!