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 charges
• 00:27 – How doctors negotiate with insurance companies
• 00:56 – In-network vs. out-of-network explained
• 01:21 – How insurance companies decide what they pay
• 01:55 – What Medicare rates really mean
• 02:40 – Medicare allowed amounts and patient responsibility
• 02:55 – Why insurance might pay more or less than Medicare
• 03:17 – Percentage-of-charge contracts (and why they’re rare now)
• 03:43 – Why charges still look so high
• 04:09 – The real costs of running a medical practice
• 04:29 – Why billing and reimbursement are separated in U.S. healthcare
• 04:51 – How this affects what patients ultimately owe

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