Why won’t the Hospital take my Health Insurance?

Just like you have a contract with your health insurance provider in which you promise to make premium payments in exchange for coverage, health insurance companies have contracts with hospitals that may include how much the insurance company is willing to pay the hospital for specific procedures.

Hospitals in Georgia, as well as hospitals in other states, negotiate with health insurance companies, such as Aetna, Humana, United Health Care, Cigna, and Blue Cross-Blue Shield about how much the insurance companies are willing to pay the hospital for certain medical procedures, among other things.

When those negotiations break down or stop altogether, your hospital will more than likely stop accepting your health care insurance.

In cases involving Medicaid, hospitals will receive payments either on a case-by-case basis, or a set dollar amount per day of inpatient care, and/or fees for individual services and supplies.  The levels of these payments are set by state governments, in this case, Georgia.

With Medicare, they just won’t bill it as Medicare is a secondary payor.

A study by Robert Berenson of the Urban Institute looked into the details of how hospital negotiations work, and how they contribute to the pricing differences that may be present in certain states, counties, and even neighborhoods.

Mr. Berenson talked to many hospital leaders who indicated that hospitals are using their market leverage to negotiate terms of payment with local health insurance companies.

Hospitals that controlled the “must-have” resources have the most power. For example, if there’s only one pediatric hospital in your town, they have a more powerful position to negotiate with the local insurance company.

Also, hospitals that consistently are full of patients have more negotiating power as well.  For example, if your hospital is negotiating with Blue Cross-Blue Shield, over the costs of certain surgical procedures, the hospital can easily walk away from negotiations because there are likely other health insurance providers that can bring the hospital more than enough patients to fill their beds to capacity.

Hospitals that are more prestigious also have more negotiating power with health insurance providers than lesser-known hospitals

All of this means that the cost of medical care, and whether or not your hospital will take your health insurance is based upon market forces that differ from what you, as a patient, would be willing to pay in a free market.

In addition, smaller hospitals in close proximity to each other are banding together to negotiate with health insurance providers.  This only increases the chances of your local hospital no longer accepting your health insurance in Georgia.

Large insurance companies such as Aetna, Humana, United Health Care, Cigna, and Blue Cross-Blue Shield, have more market power than smaller insurance companies and generally pay the hospitals less money for certain medical procedures than smaller insurance companies. In turn, the uninsured generally have been charged higher prices.

The Atlanta law offices of Christopher Simon suggests that you call your hospital if they won’t take your insurance and speak to someone in administration in order to fully understand why they won’t accept your health care insurance. You can also call your Health Insurance company and make sure they have everything they need to process the bill.