Understanding Charges
Understanding health care charges versus actual cost can be complex and is driven by many factors, especially your insurance coverage. First, it is important to understand that charges are not representative of what patients ultimately pay for services. Second, our team is here to help you understand the charges listed on our website and—based on your insurance coverage—estimate the cost to you. If you would like to receive an estimate, you may reach a member of our team at 931.490.7277.
Allowable Charges
In most cases, the amount collected by a hospital is less than the charges billed. Allowable charges are the hospital charges less all discounts provided to the government, commercial insurances or uninsured individuals. Four common examples are:
- Government programs such as Medicare and Medicaid pay hospitals much less than billed charges. These payments are determined by the government agencies and hospitals have no ability to negotiate reimbursement rates. The patient’s deductible and copayments are determined by the government and coinsurance amounts are based on what the government deems to be the allowable charge.
- Commercial insurers or other purchasers of health care services usually negotiate discounts with hospitals on behalf of the patients they cover. These discounts are defined in a contract between the insurer and the hospital. The patient’s deductible and copayments are determined by the insurers and coinsurance amounts are based on what the insurer deems to be the allowable charge. When there is no contract between the insurance company and the hospital, the allowable charge and patient cost are based on the total billed charges.
- Uninsured patients also receive an uninsured discount on all services. The discount varies from hospital to hospital but is applied to all patients with no health care coverage.
- Prompt payment discount policies and policies that allow low-income persons to receive reduced charge or charity care are also typical among hospitals.
Non-Hospital Charges
The information provided here is related to hospital charges only. Physician charges are independent from hospital charges. You may also receive separate bills for services rendered by your primary physician, anesthesiologist, radiologist, pathologist or Emergency Department physician.