Hi all,
Recently had surgery done privately with no PHI and the bill had a 'known gap expense' of $700. Apparently it's something to do with PHI or Medicare on how much you get back or something. Does anyone know exactly what this is?
Thanks
What is Known Gap Expense
[Deactivated] on 06/08/2020 - 11:42
Comments
We paid for everything out of pocket
Then the $700 was part of your total out of pocket.
$700 would have been what you were out of pocket for if you had some form of cover.
(Educated guess only based on details available)
So if I had phi, this is what I would pay on top, it seems kind've irrelevant to the actual surgery itself. It seems as though the surgeon is charging more because people have phi? It's like a theoretical charge, here's how much I charge for the procedure but if you had phi you would pay this, therefore it's added to the bill?
@[Deactivated]: It is pretty irrelevant if you do not have any cover. Your invoice/receipt is probably generated from a very liberal use of templates.
@[Deactivated]: If you agree to it before hand, yes.
It is a contract like any other. If both sides are amenable, why not?
It seems as though the surgeon is charging more because people have phi?
Medical expenses are inflated due to a few aspects, one being the insurer/single payer (Government) system. Another being coverage for non-payments - i.e. surgery costs $X; most of that will be costs (labour, materials, overheads, etc), some of it will be profit, and some of it will be to cover the costs for patients who don't pay at all.
We don't have phi
what about Medicare?
Yeah I have Medicare
@[Deactivated]: "We paid for everything out of pocket" ? Hadn't anything covered by Medicare then ? :O
@bazingaa: Sorry, I meant I paid everything in full but haven't made any Medicare claims. I'm just wondering what this fee is. It wasn't even in the initial quote, it just seems like an add on.
@[Deactivated]: It aint an add on! It is what somebody would be charged IF they had PHI (not in addition, they would pay JUST $700 out of pocket)
Believe it or not, you are not the only person a surgeon generates bills / invoices for :/
@7ekn00: Yeah that's what I'm trying to understand, what is it? It seems like an add on to me because it's got all the procedures there and cost. Are you saying I'm charged as if I had PHI? Also the anaesthesist didn't have this fee.
What exactly am I paying for?@[Deactivated]: 1) With health care there is always a "gap" between what is covered (by MBS and/or PHI) and what is charged
2) You would have paid more than $700, what you paid would have only been $700 if you had PHI
3) The anesthetist has a separate invoicing system from the surgeon (so different lay out)
4) You have paid for the surgery in full - get your calculator out, the $700 should not be included in the "Total" (and if it is, then the surgeon has a very weird way of doing his invoices - which happens, but doesn't change the fact it would only be $700 with PHI)1) With health care there is always a "gap" between what is covered (by MBS and/or PHI) and what is charged
Yes this is why I pay in full first then claim back from Medicare, I thought the gap was this difference
2) You would have paid more than $700, what you paid would have only been $700 if you had PHI
We paid more than $700 of course. But we don't have PHI so we pay for the entire surgery and claim what we we can from medicare.
3) The anesthetist has a separate invoicing system from the surgeon (so different lay out)
Sure, they're independent businesses, each have their own invoicing style
4) You have paid for the surgery in full - get your calculator out, the $700 will not be included in the "Total"
My understanding is that it is included. The invoice looks like this:
Cost of surgery $x
Known gap $700
Total $x + $700
I paid total, not just cost of surgery
Sorry I'm having a hard time understanding but I appreciate you trying to help
Gap is based on Private Health Insurance i.e.
Surgery Cost - $2000
Private Health cover - $1300Which leaves a gap of $700 - The amount you would have to pay out of pocket
Being you didnt go through PHI it has no relevance to your situation.
yeah that's what gap sounded like to me as well. The invoice was more like
Surgery cost - $2000 (obviously more broken down)
Known gap - $700
Total $2700This 'known gap' was not in the initial quote either
^^ this exactly, get your calculator out and verify
There's literally 3 items on the invoice including the known gap, I have verified that the total I paid INCLUDES the known gap charge. I did ask but she seemed pretty vague about it so I thought it's just something I don't understand, so I asked out of curiousity on this forum
Then it its the weird way the surgeon has their accounting software setup
Person with PHI = $700
Person without = $700 + base item costs@7ekn00: Yeah that's what I thought as well, the question is, what is this $700? There doesn't seem to be an explanation for it except 'known gap' expense'.
Seems to me that the only people that can answer this properly is the billing department of the hospital. If you think it's not adequately justified, then dispute the fee.
You might find the "surgery cost" is the cost as specified by medicare for the procedure number, whereas the total is their real fee and just reported strangely.
Surgery cost - $2000 (obviously more broken down)
Known gap - $700
Total $2700Could be the Surgery cost is the amount the government sets/recommends for the procedure.
The $2700 are the surgeon's charges, set by the surgeon.
The known gap is documented and signed by the patient, or responsible person on their behalf, prior to the surgery. This has been the case for the 7 surgical procedures involving our household over the last 7 years.I see, why is there a difference in the recommended and actual charge?
I had a look at all the quote document given, wasn't printed on there but everything else was the same hence why it seemed like an add on. I'm not going to dispute it or anything, just curious.The surgeon is not obligated to charge the recommended fee. They can charge what ever they wish, but are legally obligated to disclose all costs prior to any procedure.
Clearly this doesn't apply in the case of an accident/emergency where the situation may not be known. This is generally in a public hospital and covered by Medicare anyway.I see, thanks, so this means some surgeons are cheaper than others? I thought what the government set was already pretty generous haha
@[Deactivated]: Yes, there is considerable variation. Some charge the government recommended fee, others charge the AMA recommended fee, others charge more again.
@DashCam AKA Rolts: In addition, they are also not obligated to charge the same fee all the time. They can and do vary the fee based on patient's individual circumstances. It's fairly common to not charge pensioners an out of pocket for example. They are more like tradies in that the quote given is specific to that job. Be wary of using your PHI's register of "Gap Cover" doctors. Being on that list does not obligate the doctor from not charging an out of pocket.
I'm not surprised you are confused as they are using the term incorrectly. "Known Gap" refers to a specific product offered by many (but not all) PHIs and is not relevant in your case. It allows medical practitioners to charge a gap to patients while invoicing the remainder to the PHI seperately. Most limit this to a maximum of $500 per practitioner per admission.
Other funds, the biggest being NIB, have no such product and doctors must either accept NIB's payment in full or invoice the patient in full. If the latter is done, the patient then claims a rebate from Medicare / NIB. Its a win-win for NIB as they either get the doctor to accept one of the lowest fees offered by the PHIs or the patient gets rebated around 60% of that already low fee with Medicare contributing most (75%) of that rebate. The system is so obfuscated it is hard for the patient to navigate and NIB can always blame the doctor for being greedy.
and is not relevant in your case.
So do you think it was incorrectly charged or they should've named it something else? Like I mentioned, it wasn't in the quote and there was no mention. It just appeared and I'm just wondering what it's for
Other funds, the biggest being NIB, have no such product and doctors must either accept NIB's payment in full or invoice the patient in full
Do surgeons typically accept the NIB's payment? I don't really understand why NIB does this, The gap payment is paid by the customer and they'd pay out what they'd pay out anyways regardless of whether the surgeon charges gap or not.
Medicare contributing most (75%) of that rebate
Yeah I read this online as well but I only got back 1/5 of what I paid for the anaesthetists and I'm probably expecting 30%-40% back from the surgeon because of this unknown gap.
I wonder if medicare rebates and PHI actually just increase fees. If there wasn't PHI and medicare, would the surgeon still charge what they do? Especially for someone on DSP, insurance is expensive but the public system has screwed over my family multiple times that after this incident I really don't trust it anymore for elective surgeries.
NIB does this because they have crunched the numbers and they come out ahead. They have a lot of brand loyalty from when they were a mutual.
Personally the system is the way it is because it keeps the key stakeholders happy. A better system would fund the public hospitals adequately so that patients have timely access to elective surgery. This would put downward pressure on private medical fees. Unfortunately this would require higher taxes which the general population all know is super bad even though we all end up paying more overall.
Personally the system is the way it is because it keeps the key stakeholders happy.
By this you mean PHI boards of directors and surgeons? I find it really disheartening that people who already have more than enough to live on for several lifetimes still try to take from the common or disadvantaged. And now I've realized even doctors, try to squeeze people and the government for every penny they can get. I can't help but think that medicare rebates (i.e tax money) just allow them to increase fees. I've heard the government spends billions every year funding PHI. Also, there was a thread on this forum where people were saying most surgeons hide a lot of their income to avoid paying tax.
Unfortunately this would require higher taxes which the general population all know is super bad even though we all end up paying more overall.
I don't know about this, countries with better public health systems typically spend less than ones like say, America don't they? I think this is either debatable or the amount is actually rather insignificant for the benefits.
@[Deactivated]: To be fair to medical staff, they have limited market power beyond choosing what they charge individual patients. They aren't allowed to discuss fees amongst themselves as that would be a violation of anti-collusion laws so only roughly know what others are charging from indirect sources. Like most rational businesses, they end up charging what the market will bear.
My point about the public health system is that it is the way to influence pricing without directly regulating private doctors fees.
To be fair to medical staff, they have limited market power beyond choosing what they charge individual patients. They aren't allowed to discuss fees amongst themselves as that would be a violation of anti-collusion laws so only roughly know what others are charging from indirect sources. Like most rational businesses, they end up charging what the market will bear.
Well I mean there's what the government sets as the price they recommend and also, we have to consider the market, if I want a second quote, I have to go see another specialist, that's $200+ for that single consultation. For the vulnerable, for the sick, for the poor that's a tough decision to make but I also understand not everyone is in that position. It's not even a decision one thinks of, shopping around for the cheapest surgeon. So they add just a cool $500-$700 on top because otherwise Medicare covers 75% but you have more money than that right? You're right, from a business standpoint it makes sense, from a business standpoint plenty of questionable decisions makes sense I'm not going to argue with this. I guess had this just been the charge for the surgery itself I wouldn't have thought twice but the fact that it was just +$700 'known (more like unknown) gap' makes it feel different. And again, the fact that so much of that wealth is hidden where it doesn't even get taxed but that $700 I earnt was. I guess doctors aren't always what they're portrayed as in shows.
My point about the public health system is that it is the way to influence pricing without directly regulating private doctors fees.
I agree, but I don't think that's happening with our government any time soon :)
It's something you should "know"
well it's known now :)
It is how much you have to pay out of your pocket.