Wednesday, August 13, 2014

Making up the numbers

I've noticed that when Cigna processes hospital bills, they are now playing an accounting game to inflate the hospital charges. Here’s how that works: The hospital bills $8000 for a short stay across several line items. Cigna intends to pay $4000. What used to happen is that Cigna would list the billed line items and pay some of each line item. What now happens is that Cigna lists the billed line items totaling $8000, pays nothing on those line items, and then adds a new line item under "ancillary charge" for $4000 and pays that. This doesn't change the amount paid, which remains $4000. This just inflates the amount billed, which goes from $8000 to $12,000.

I can think of a few consequences:

  • By inflating the billed amount, Cigna makes their discount look better. After all, they just saved us $8000 instead of the $4000 that they actually saved us.
  • By grouping their entire payment under an invented ancillary charge, Cigna makes it impossible to see how much they are paying on each billed line item. That makes it more difficult for providers or customers to audit or appeal the claims processing.
  • By inflating the billed amount, Cigna makes it more difficult for anyone to figure out how much health care costs, or at least how much it would cost without Cigna's gracious intervention.

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