Is Medicare Deceptive about Reimbursements?

By the Journal of American Physicians and Surgeons, Special for USDR.

Medicare’s recent release of hospital charges and Medicare payments was widely covered in the press, but the figures were wrong, writes anesthesiologist G. Keith Smith, M.D., in the summer issue of the Journal of American Physicians and Surgeons.

The true amounts hospitals receive from Medicare are hidden, as the prices released don’t include uncompensated care kickbacks or the provider tax rebates, Smith observesBecause these figures are withheld, payments received by physician-owned facilities like the McBride Clinic Orthopedic Hospital, which don’t accept this taxpayer money, look high compared with corporate and not-for-profit hospital payments, when in fact the latter receive much more in total.

“It’s bad enough that the hospitals lie about their income,” Smith states, “but now the federal government is colluding with their act, while posing as the great champion of price transparency.”

The New York Times asks the right question: “Why are the hospitals charging so much more than they know they will receive?” On average, the charges billed are three to five times the payment, Smith notes. The hospital industry claims that that this overcharging is justified to combat the discounts demanded by insurance carriers, and that hospitals providing large amounts of “indigent” care are charging more to offset these “losses.” But the true answer, Smith states, is that the giant hospital bills provide the red ink necessary to maintain the fiction of the not-for-profit (tax-exempt) status of these creators of personal bankruptcy. They also provide the basis for claiming larger DSH (disproportionate share hospital) uncompensated care payments to the extent that the hospitals claim they don’t collect on their giant bills.

“The reason why the patient with no insurance or no money at all is likely to receive the highest bill of all is the hospital’s effort to maximize the take from the taxpayer!” he writes.

After the ObamaCare debate, the discussion has shifted from coverage to costs. Smith suggests that by ratcheting down fees, insurers will make services unavailable, thus reducing the claims to be paid.

Despite its professed concern about costs, Medicare pays hospitals 40 percent more than private physicians for the same service.

Smith concludes that Medicare and Medicaid are not principally concerned with getting care to the elderly and the poor but rather with funneling money to politically connected interest groups.

The Journal is an official publication of the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties, which was founded in 1943.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.

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