Why Does the Insurance Company Pay Less Than What My Physician Charges?

Why does your doctor bill one amount, but your insurance pays something completely different? In this episode of the Take Care podcast, Melody Mulaik breaks down one of the most confusing parts of healthcare billing and explains why the number on your bill is rarely the number your physician receives.Using a real listener question, this episode walks through how insurance contracts work, how in-network and out-of-network status is decided, and why Medicare rates play such a big role in what doctors are paid. Melody also explains the real costs physicians carry behind the scenes and why the gap between charges and payments exists in the U.S. healthcare system.If you’ve ever looked at an Explanation of Benefits and thought, “This makes no sense,” this episode is for you.In this episode, Melody discusses:00:00 – Why insurance doesn’t pay what your doctor charges00:27 – How doctors negotiate with insurance companies00:56 – In-network vs. out-of-network explained01:21 – How insurance companies decide what they pay01:55 – What Medicare rates really mean02:40 – Medicare allowed amounts and patient responsibility02:55 – Why insurance might pay more or less than Medicare03:17 – Percentage-of-charge contracts (and why they’re rare now)03:43 – Why charges still look so high04:09 – The real costs of running a medical practice04:29 – Why billing and reimbursement are separated in U.S. healthcare04:51 – How this affects what patients ultimately oweTake Your Healthcare Advocacy FurtherNavigating the healthcare system doesn't have to be a solo journey. For deeper dives into the topics we discuss on the show, plus exclusive "insider" tips delivered straight to your feed, subscribe to Take Care Newsletter.Subscribe to the Take Care Newsletter Connect With Melody on LinkedInGot a Healthcare Question? Ask Melody Now.