Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP
Posting-Version: version B 2.10.1 6/24/83; site mcnc.UUCP
Path: utzoo!watmath!clyde!burl!mgnetp!ihnp4!houxm!houxz!vax135!cornell!uw-beaver!tektronix!hplabs!sdcrdcf!sdcsvax!dcdwest!ittvax!decvax!mcnc!jwb
From: jwb@mcnc.UUCP
Newsgroups: net.med
Subject: Re: insurance and doctors fees
Message-ID: <2121@mcnc.UUCP>
Date: Fri, 22-Jun-84 16:57:16 EDT
Article-I.D.: mcnc.2121
Posted: Fri Jun 22 16:57:16 1984
Date-Received: Wed, 27-Jun-84 19:38:14 EDT
References: <764@phoenix.UUCP>
Organization: Microelectronics Ctr. of NC; RTP, NC
Lines: 26

One reason physicians have different fees depending on the source of payment
is that Medicare/Medicaid payment is based on a *percentage* of the "usual,
customary, reasonable fee", which varies by geographical area and medical
specialty.  The last I heard, around here the percentage was 80% of what Blue
Cross/Blue Shield will pay.  The physician has several alternatives.  One is to
accept the 80% from the Feds and attempt to collect the rest from the patient.
Another is to just settle for 80%.  Another is to not accept patients with
this type of coverage.  In addition to obvious problems with this scheme, in
areas where Medicare pays a lot of claims, the private insurors are starting to
adjust their allowable charges downward, saying the 80% level is becomming the
prevailing fee.  If this were continued, all fees would eventually converge to
zero.  Of course the objective of the Feds is to reduce the costs of their
massively expensive health benefit programs without cutting off anyone's
coverage.  Their method, however, has produced massive confusion and incon-
sistencies with respect to fees.  The above method is gradually being scrapped,
to be replaced with a flat fee, based on diagnosis, regardless of the actual
costs to the health care provider.  Presently this scheme (called DRG's, for
Diagnosis Related Groupings, or something similar) applies only to hospitals,
although everyone expects it to eventually apply to Physicians and to be
adopted by the private insurors.  It will open a new set of problems (for
example for teaching hospitals, where costs are higher).
	Jack Buchanan
	Medicine and Biomedical Engineering
	Univ of North Carolina at Chapel Hill
	decvax!mcnc!jwb