Different Pay Rates by Michael Gorback MD


I’ve been trying to find the rationale for paying different rates for different points of service and I found a handy PDF file from HHS. These are just the first two paragraphs. According to Google translate (Bureaucrat to English) this says, “Rates are paid according to lobbying power. ASCs are less powerful than hospitals so they get paid less. Physician offices are paid the same as ASCs but in Zimbabwe dollars”.

“In the annual updates to the ASC payment system, CMS sets relative payment weights equal to OPPS relative payment weights for the same services and then scales the ASC weights to maintain budget neutrality from year to year, as mandated by the MMA. For calendar year (CY) 2013, the ASC relative payment weights were scaled to eliminate any difference in the total payment weight between CY 2012 and CY 2013.

The relative payment weights for CY 2013 were scaled by holding ASC utilization and mix of services constant from CY 2011 (the most recent full year of claims data available) and comparing the total payment weight using the CY 2012 ASC relative payment weights to the total payment weight using the applicable CY 2013 OPPS relative payment weights for covered ASC surgical procedures and separately payable ancillary services. This process takes into account the changes in the relative payment weights between CY 2012 and CY 2013.”

Send me 500 bitcoins by Wednesday or I will forward you the entire section and make your eyes bleed. And then I will send it to your loved ones. If you contact the FBI you will receive TWO copies.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  7 comments for “Different Pay Rates by Michael Gorback MD

  1. Kathy
    May 7, 2014 at 8:15 am

    Good article. You are dancing into a topic that hospitals have kept out of mainstream discussion, that a service is worth more if it takes place on hospital property. While hospitals are recently taking advantage of that, its roots are in a problem that we will have to address: our healthcare system has let hospitals charge more for simple stuff to pay for the complicated stuff. That is how our system has supported research and medical education, too. Now that we are trying to reduce medical charges, this shell game isn’t working so well. It’s time for a general, deep discussion of how to pay for the secondary and tertiary services and education we need without sucking the outpatient or simple treatment folks dry. It won’t be pretty.

  2. jim
    May 2, 2014 at 10:48 am

    I dont not understand pay rates I am not a doctor. But as a person who occasionaly goes to the emergency room, I never understood charge rates. Diiferent people get charged different amounts for the same service at the same place by the same hospital, doctors and nurses. I must be missing something. When I go to the grocery store I pay the same price for the same gallon of milk the guy behind me in line is paying. It appears to me from my side that doctors and hospiutals just make up prices from thin air customer to customer, day to day. Can someone explain that to me?

    • Dr Bonz
      May 2, 2014 at 7:55 pm

      Jim. Technically, everyone gets “charged” the same. The key concept here is that charges are absolutely meaningless. People can ask me, “Doc, how much do you charge to do a knee replacement?”. I can “charge” whatever I want. I can say, my “charge” is a million dollars. It doesn’t matter. The charge is a fictitious number. Different private insurance companies, Medicare, Medicaid, worker’s comp, all PAY different amounts (most are based on the rate that Medicare charges) . I can CHARGE all of those entities my million dollars. They will PAY only what they pay and I have to accept it. Maybe that is the difference you are seeing.

      • Dr Bonz
        May 2, 2014 at 8:02 pm

        To use your grocery store analogy, everyone in line at the store gets CHARGED the same amount (in other words, the same groceries all COST the same for everyone), but everyone in line doesn’t necessarily PAY the same. Some might pay full price, cash (no insurance patient). Some might pay a portion of the cost and pay the rest with coupons (insurance patient), some might pay nothing and their food stamps pay for all of the groceries (Medicaid patient).

        To take it further, if you are paying and your clerk says, “you owe $100” the store GETS $100. If I as a physician charge a patient $100, their insurance company will TELL ME what I can charge and pay me what THEY feel is appropriate.

        • Sir Lance-a-lot
          May 2, 2014 at 10:25 pm

          Also (following the insurance companies’ line of thought), if I ran a tour business, came and talked to store manager, and told him I would steer a thousand people in there this summer to buy sandwiches, but only if he’d take 30% off the cost of each one, he’d cut me a deal, and some of those people in the checkout line would be paying 30% less than the others.

          Of course, if the store manager were a hospital administrator, he’d then pay the deli staff 30% of what they usually make for making them.

          And then the deli staff would start looking for new jobs, or else quit on the spot, unless they were physicians, in which case they’d offer to clean up and chop tomatoes after closing, for no additional pay.

  3. Pat
    May 2, 2014 at 8:21 am

    I actually own one of those 100 trillion $ Zimbabwe notes (available for $12.99 at capitalistpig.com). A few years ago I paid $8.99 for mine, so clearly the Zimbabwean currency is improving. As entitlement spending and CMS gobbeldygook continue to accelerate the U.S. toward its well-deserved collapse, I hope marxist, murderous Zibabwe can turn it around. When my 100 trill note hits full value, I’ll be in fat city and CMS can have my UPIN, NPI, relative weights, and all their obfuscatory nonsense lingo, and stuff ’em.

  4. Sir-Lance-a-Lot
    May 2, 2014 at 6:19 am

    My brain is bleeding.

    And I’m not even at work yet.

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