There’s nothing really exciting or interesting about this story except this: since I’ve been putting this blog portfolio together, I’ve been struck by how similar the news 30-40 years ago was to now. We’re still seeing stories about medical costs, insurance and reimbursements, not unlike this story from the early 1970s. Hospitals are still complaining about their insurance reimbursements, and insurance companies are still moaning about how much hospitals charge for their services. I found this clip in the Lowell (Mass.) SUN, which apparently didn’t know quite how to play the story — they ran it on the OP-ED page.
By ARTHUR FREDERICK
BOSTON (UPI) – Hospital costs in Massachusetts are audited to determine Blue Cross reimbursement rates, and the 37 men who do the audits are on the Massachusetts Blue Cross payroll.
The auditing procedure has been allowed since May 18, 1956. Chapter 176A of the General Laws says the state Rate Setting Commission can require that an audit be conducted prior to having Blue Cross reimbursement rates established at hospitals.
The Commission contracts Blue Cross to do the auditing. The auditors answer to the Rate Setting Commission, but are paid by Blue Cross and receive Blue Cross fringe benefits.
Blue Cross pays hospitals either what a given treatment costs the hospitals, or what they charge for that treatment, whichever figure is lower. The hospital’s cost of treatment is generally lower than what it charges, and that is usually the figure paid the hospital by Blue Cross.
The audit determines what the hospital costs are.