What are negotiated or discounted fees?
PPO and HMO and EPO contracts are based on negotiated fees. Insurance companies make contracts with medical providers that stipulate what the insurance company will pay for any given procedure. These negotiated fees are substantially less than what you would pay without insurance, thus resulting in significant savings to you. For example, if the provider s retail bill is $1,000, the contract may require it to reduce that charge to $600. Your co-insurance then would be based on $600 and the balance of $400 would be written off by the provider. Thus, negotiated fees are an important part of what you purchase.
