The medical billing process is confusing, to say the least.
Every service rendered by the hospital has a specific billing code associated
with it, and depending on the circumstances under which the procedure was
performed, certain billing modifiers may need to be used to adjust the final
cost to the payer. Unfortunately, billing departments often make mistakes,
either through oversight or sometimes in an attempt to obtain more money that can
cost the payer (your company) a bundle if they go unnoticed.
As a self-insured employer responsible for providing health care
coverage for your employees, it’s vital that you have a cost control process in
place to catch billing mistakes and to ensure all options are explored to
ensure the amount being paid is as little as possible. This could help save
your company huge sums of money on an annual basis.
Payment Options for
Self-Insured Employers
As a self-insured employer, you have options when it comes
to paying for hospital services on medical bills. Understanding these options
can help you find the choice that will save your company the most money.
- Hospital inpatient services — For inpatient services rendered to one of your employees, you have a few payment options. You could pay using any of the following:
o MS-DRG
(Medicare severity diagnosis related group) Medicare Rate x Bureau Adjustment
Factor — (1.008) x 1.20 (non-outliers)
o MS-DRG
Medicare Rate x Bureau Adjustment Factor — (1.008) x 1.80 (outliers)
o Hospital
inpatient cost-to-charge ratio
There’s a huge advantage to paying
per the hospital cost-to-charge ratio. Why? While the cost-to-charge ratio is
calculated by dividing the cost to provide a service by the hospital’s charges
for the service and multiplied by other factors, the net payment owed is always
significantly lower than the billed charges.
- Hospital outpatient services — For outpatient services rendered to one of your insured workers, your payment options include:
o Medicare
Outpatient Prospective Payment System (OPPS) rate x Bureau Adjustment Factor
(1.62)
o Hospital
outpatient cost-to-charge ratio
Again, paying per the hospital’s
cost-to-charge ratio is the better option, as the net payment owed is always
significantly lower than the actual billed charges.
The fact of the matter is, the medical billing process is
often overwhelming for employers. Unless you’re a true billing expert, spotting
billing mistakes and understanding your various payment options can be confusing,
frustrating and time-consuming.
Your best option is to work with a medical bill review
company that can handle all of this for you. A bill auditing company will
review every charge you receive, spot mistakes, challenge those errors, and
ensure the amount you pay is as little as possible. It’s a smart investment
that can yield significant savings on health care costs for self-insured
employers.
Remember, the cost of health care for employers is
skyrocketing, but you do have the power to keep costs in check. With a focus on
cost control, you can reduce your expenses while still ensuring your employees
get the coverage they need.
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