tci Medicare Compliance & Reimbursement - 2006 Issue 6

REIMBURSEMENT: Private Sector's Administrative Costs Rival Medicare

Medicare cost reports don't tell the whole story, study reveals.Health care policy analysts have for years stood by the axiom that Medicare administrative costs are significantly less than private insurers' administrative costs--but a new study shows a much narrower margin."There are more costs in running the Medicare program than just paying claims--costs that are regularly included, and are more transparent, in any private sector assessment of administrative costs," notes the Council for Affordable Health Insurance in a Jan. 10 study. Such costs include policy setting, management, raising capital, premiums and commissions, claims processing, fraud, and premium...

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