A myriad of factors go into determining the costs of medical care. Prices are often opaque, and deductibles, co-pays and in and out-of-network providers can really muddy the waters.
Here are a few of the most important factors that determine how medical services are priced.
In-network versus out-of-network
Visiting an in-network provider will be cheaper because the medical provider has negotiated rates for particular services with your insurance plan. A back X-ray, for example, could be set at $100 through your plan, but for those who have other plans or no insurance, the provider may charge $150 for that same service. Emergency services are different in that your plan will cover the costs whether the providers are in-network or not.
Medicare and Medicaid
Medicare and Medicaid have a major impact on the market. Through the Centers for Medicare and Medicaid Services (CMS), the federal government sets the costs these programs will pay for medical services by analyzing the labor and resources involved in providing the service.
Major insurers use these calculations to negotiate payment schedules with providers, or just adopt Medicare’s established payment schedule.
Large providers
Some providers may be able to negotiate higher prices with insurance plans due to their market clout. For example, prestigious university hospitals or lab testing chains may command prices higher than a small, little-known practice.
Ways to save some money
Be familiar with your health plan and what it covers, including knowing your deductible and out-of-pocket costs that are applied towards it. Also look into whether you need advance approval for tests, specialist visits or elective procedures. Staying in-network whenever possible will save you the most money.
Other cost-saving steps include negotiating your bills with your provider, using resources such as your health insurance plan’s pricing tools or checking online resources such as the Healthcare Bluebook to get an idea of what a particular service should cost.
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