Why Removing Percent-of-Charge Provisions in Managed Care Contracts Won’t Address Concerns About High Hospital Charges

Healthcare figures to be a primary issue in the 2020 elections, with much of the focus on costs — especially hospital costs. A common concern among users of hospital services is the apparent lack of correlation between hospital charges and payment. Although some hospital managed care executives have suggested replacing percent-of-charge (POC) contract provisions with fixed-fee payment as a solution, these proposals are based on three myths regarding the POC payment methodology relative to fixed-fee payment.

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