>Hospitals set their prices above what most insurance companies will pay to make sure they get the maximum amount from the insurance company
Tis is generally not as simple. There are two prices that matter to this conversation: the hospital chargemaster and the usual and customary rate (UCR). The two are not functionally intertwined. The chargemaster exists in the hospital back office as a legal fiction and has little to no relationship to anything the insurance companies do although yes, sometimes chargemasters may be used as part of the rate negotiation with insurers. UCR is governed by what it says on the tin, it is what the market is paying in the specific geography.
The shenanigans kick in when the hospital tries to do something with the fictional difference between their chargemaster and the UCR, or, worse, tries to charge the fictional price to uninsured and under-insured individuals.
Tis is generally not as simple. There are two prices that matter to this conversation: the hospital chargemaster and the usual and customary rate (UCR). The two are not functionally intertwined. The chargemaster exists in the hospital back office as a legal fiction and has little to no relationship to anything the insurance companies do although yes, sometimes chargemasters may be used as part of the rate negotiation with insurers. UCR is governed by what it says on the tin, it is what the market is paying in the specific geography.
The shenanigans kick in when the hospital tries to do something with the fictional difference between their chargemaster and the UCR, or, worse, tries to charge the fictional price to uninsured and under-insured individuals.
I keep a short explainer here: https://jaz.co.uk/2015/10/15/hospital-retail-pricing-for-dum...