In a recent article published by one of the world's largest re-insurance companies, the following excerpt authored by Dr. Colin Plotkin appears: "As a vendor who continues to work on behalf of several major clients to achieve results better than the standard PPO discounts, Dr. Colin Plotkin has been able to achieve remarkable settlements that are accepted by both providers and insurers."
According to Dr. Colin Plotkin of Dr Plotkin Consulting, hospitals can charge "what they want" There is no regulation regarding the cost-to-charge ratio from a hospital provider, as long as there is no parallel billing and a single "exit price" is charged to every patient. In other words, the original billed amount has to be the same for everyone, insured, uninsured, Medicare, Private Insurer, international or anyone else. The difference comes in how much a hospital provider is willing to discount a bill (the reimbursed amount), and depends on who the payer is, with Medicare recipients getting the most favorable rates.
Dr Plotkin goes on to say that "it is becoming more common to negotiate individually on catastrophic claims in order to mitigate large losses to insurers. Normal, run-of-the-mill, volume-based claims fall under provider contracts. Negotiating behind these contracts, to obtain larger discounts on catastrophic claims is often frowned upon by providers who might argue that if satisfaction occurred with a level of discount on smaller claims, why are those lesser contractual discounts unpalatable on the larger cases? It behooves insurers to put wording into provider contracts that will permit them to negotiate large catastrophic cases. To achieve success and favorable loss-ratios, it is important to use experts in traversing this mine field. This requires negotiators who are well versed in the cost-to-charge ratios of hospitals, average costs, insurance knowledge, medical expertise, legal knowledge, economics, and a host of other attributes. Attempting to negotiate the increasingly common million dollar claim, is not for the rookie negotiator, or the faint of heart".