This is some of the best hacking I've seen on Hacker News in a long time!
My son broke his arm skiing a few months ago and we went to the clinic that is at the ski resort. They x-rayed him, set the bone a little (thankfully it didn't need much), put on a splint, and put his arm in a sling. Straightforward simple stuff.
The clinic is not on our insurance so we filed a claim with them after the fact ourselves using the detailed receipt the clinic provided. It was out of network so they didn't pay for most of it (for some reason they did pay the $12 or whatever for the sling), but they applied the cost to our out-of-network deductible. Except not the cost the clinic charged, the cost they thought the clinic should have charged, which was of course about $150 less. What?? I'd love more insight into how all that makes sense in someone's mind.
Emergencies are always considered In-Network by law *.
For example, if you are traveling Out of Area (OOA) and skiing in Colorado, and you have a medical emergency, emergency room care is considered In-Network. Any financial responsibility you have under your health plan (coinsurance, copay) should be calculated as part of In-Network.
* If you have an HMO or EPO plan, it is black and white language. If you have a PPO plan, legally it is a bit squishy because of the already provided for out of network (OON) access. BUT - generally - any emergency is considered in network no matter what product you have and where you are.
He went to a clinic, while you, me and he may all agree it fits the definition of an emergency, he didn't go to the ER.
Getting emergency care:
In an emergency, you should get care from the closest hospital that can help you. That hospital will treat you regardless of whether you have insurance. Your insurance company can't charge you more for getting emergency room services at an out-of-network hospital.
For something fairly simple like a cast, that can still end up more expensive than the clinic option though, depending on your insurance. ER co-pays and co-insurance can be pretty high. For example, a typical ACA/Obamacare "Silver" level plan in my area has 20-40% co-insurance on an ER visit (until the $5k-10k annual out-of-pocket max), which can easily be more than whatever you'd end up paying for the non-ER option to set a broken arm.
Your health insurance doesn't want to pay for it because they deem what the clinic charged as "too expensive" or another reason there isn't a pre negotiated contract in place between provider and insurer. The clinic can extract what it can from your because your insurance didn't cover it, sending you to collections if you don't pay [1] [2].
Many folks harp about how government insurance doesn't pay enough, and there is some validity to that argument, but without cost controls or other guardrails, the patient is always caught between the payer (private insurance) and the provider. Both are attempting to maximize their profits, the former through "cost plus" accounting, the latter at point of sale/purchase/care.
Tangentially, this is why global/nomad/world traveller health insurance typically excludes the US specifically from coverage and visitors to the US in many cases will fly home for urgent medical emergencies vs receiving care in country; the economics are simply unpalatable.
Insurer tries to get away with: the provider is not in network, but not strictly out of network (because they know that would be covered by the law), so they call them "participating", a 50% coinsurance applies and patient owes 121K.
(Resolved in patient's favor after state government got involved and media coverage about it).
More of a federal Medicare problem because the government runs an insurance plan that fails to throw its heft around and negotiate beyond “you can’t charge us more than other insurers”.
Gets very opaque fast.
Edit: lots of (I assume) correct points below about hospital/procedure charges, but it’s only in 2026 that Medicare will start negotiating drug prices, and just for 10 medications in the first year:
> For the first time, Medicare will be able to negotiate prices directly with drug companies, ensuring lower prices on some of the costliest prescription drugs
> More of a federal Medicare problem because the government runs an insurance plan that fails to throw its heft around and negotiate beyond “you can’t charge us more than other insurers”.
You've got it backwards. Medicare does negotiate, in some cases reimbursing less than COGS. Hospitals and providers make up for it by charging private insurers more (that's why private insurance contracts always state that they reimburse X% of the Medicare Allowable Rate, where X > 100).
> Looks like it’s only starting for drugs in 2026. But until now, they paid whatever list price the manufacturers dreamed up:
We're not talking about prescription drugs - the entire thread so far has been about inpatient and outpatient care.
Medicare does not negotiate prices for prescription drugs at the moment, but that's because pharmaceutical coverage for Medicare is provided by private insurers, and those private insurers are responsible for negotiating the rates.
> There are Reference Based Pricing plans available in the commercial medical insurance world now.
> So yes you can "pay what medicare pays" be prepared to have some pissed off doctors and balance billing.
You're not wrong but your description is conflating two different things.
What you're describing - "pay what Medicare pays" is more or less how private insurance typically works for in-network providers. The provider gets paid X% of the Medicare Allowable Rate (where X > 100), and that comes either from the patient or the insurer (depending on any applicable deductible, copay, OOP max, etc.)
Reference-based pricing applies that to all providers, including out-of-network providers. However, except for care received in the emergency room, the provider is allowed to bill the patient for the difference between what the insurer allows and what the provider charges. Some plans will actually allow in-network providers to bill patients for the balance. In that case, everyone wins except the patient: the insurer/employer has a fixed cap on their costs per service, and the hospital/provider doesn't have to settle for a lower rate.
>>"Reference-based pricing applies that to all providers, including out-of-network providers."
RBP is a multiple of standard Medicare rates, say 140%, often is substantially less than a negotiated rate from a Carrier, hence balance billing and not so happy provider. Basically a take it or leave it option for the provider, many of which simply take it and move on. Not claiming right or wrong, just stating facts.
> RBP is a multiple of standard Medicare rates, say 140%, often is substantially less than a negotiated rate from a Carrier, hence balance billing and not so happy provider.
Negotiated rates are also themselves set as multiples of the Medicare Allowable Rate. Both are set as multiples of Medicare rates; that's not something unique to reference-based pricing.
I had a buddy who figured out a hack to the US medical system after being hit over the head with a poolstick and being unable to remember his identity. If you don't give a real name at the ER, they don't have anyone to attach liability to.
These are simple explanations to a complex topic. I shared the nuance as to why you can be held hostage in a medical emergency in the United States. Please disregard my comment if you're not getting value from it.
No you are claiming the carrier "doesn't want to pay for it because they deem what the clinic charged as "too expensive"".
That is not nuance, that is an knee jerk unsubstantiated misleading claim. You have 0 details into what chassis the plan is carried on, what the plan design is, who the carrier is etc.
>>"this is why global/nomad/world traveller health insurance typically excludes the US specifically from coverage and visitors to the US in many cases will fly home for urgent medical emergencies vs receiving care in country; the economics are simply unpalatable."
Again misleading, there are expatriate plans specifically for visitors to the USA, and frankly, it's great coverage.
The point is that you have to specifically opt for US coverage, rather than the default global coverage, because of the eyewatering expense of medical care in the US.
You can try an appeal that the network did not have adequate coverage in the area in which your son was injured in which case they would treat it as were in network, or see if it might have been covered under their emergency room benefit instead of as out of network.
I work in this industry and can provide some insight.
Every payer has the concept of "UCR Rates" or "Usual, Customary, and Reasonable Rates" for every procedure code, for every ZIP code. For example, the median cost of an X-ray should be a certain dollar amount in Topeka, Kansas and a different (higher) dollar amount in Manhattan, NY.
When a provider is out-of-network, they'll bill as much as they possibly can to see what the insurance company will pay — the insurance company will only pay up to the "UCR Rate" for the treatments (or in your case, apply that to the deductible before the payments start to kick in). Whatever the difference is between the UCR rate and the requested amount is almost always ignored, since the doctors' motivation for the high requested rate was to try and maximize payment from the insurance company. In your case, since you paid out of pocket, you're unfortunately on the hook for that difference. In other situations the provider might also invoice the patient for that difference, but it's relatively rare.
In contrast, when a provider is in-network, they have contracted rates for all of the procedures (also typically varies by ZIP code). These are called the "fee schedule" rates, and every payer (including Medicare/Medicaid) has their fee schedule rates defined and agreed upon with the physicians/providers.
It sounds like pure fantasy to come up with a number they should charge and it is the same for every provider in a zip code. Different hospitals, clinics and offices would pay different rents, staffing expenses, supplies, marketing, utilities, and the list goes on. Not even McDonalds charges the same price for the same meal in every location in a zip code. Malls, airports, entertainment venues are easy examples of divergent pricing.
Right, the UCR is usually pegged at the 75th percentile price for that ZIP code — though that can vary from payer to payer, some can even go up to 90th percentile — it's usually determined by actuaries. It's basically a guidance that conveys "we've never met you before, but you're asking us to reimburse for a treatment, and we as an insurance company think this is the highest reasonable amount to charge for that treatment". It's also important to note that payers don't advertise whether they're doing 75th percentile or 90th percentile or 50th percentile or whatever, because then it just becomes an incentive for providers to anchor at that amount, even if it may be higher than they would otherwise bill for that treatment — they'd just submit a claim for that amount and say "cool, thanks, pay me". In single-payer countries in which the state is a monopsony buyer, there is only 1 rate (sometimes a narrow range), often per location.
In either case, the goal is to try to keep prices down, and in many cases to prevent so called "upcoding" by providers. You'd be surprised how prevalent upcoding is among providers. I've been on the phone with a provider that included in a claim an $80 line item for "oral hygiene instructions", which is a fancy way of saying "instructing the patient to floss more". I've seen another claim that asked for $300 for sign language because the patient was deaf. I've seen yet another claim that asked for $200 for a swaddle for an infant patient. In all 3 of those cases, I personally informed the clinical administrator on the other end "this is not covered", and their response was something to the tune of "oh yeah that's okay, we just put that on there to see who covers it, you can go ahead and ignore that line item".
All of this is characteristic of the fee-for-service model, which is increasingly being seen as quite flawed, regardless of whether it's done by the public sector or the private sector.
And people wonder why health care in America costs so much. You have two businesses (at least one of which is totally removed from the services being provided) trying to scam each other every time someone goes to the doctor.
My son broke his arm skiing a few months ago and we went to the clinic that is at the ski resort. They x-rayed him, set the bone a little (thankfully it didn't need much), put on a splint, and put his arm in a sling. Straightforward simple stuff.
The clinic is not on our insurance so we filed a claim with them after the fact ourselves using the detailed receipt the clinic provided. It was out of network so they didn't pay for most of it (for some reason they did pay the $12 or whatever for the sling), but they applied the cost to our out-of-network deductible. Except not the cost the clinic charged, the cost they thought the clinic should have charged, which was of course about $150 less. What?? I'd love more insight into how all that makes sense in someone's mind.