Ever wonder why the U.S. Healthcare Industry began to increase faster than the CPI, since 1983. That is the year the Internal Revenue Service made a humongous mistake, and everyone bought into it. The IRS said the contract between the health care providers and the private insurance companies determined the taxable revenue for the providers.

Look at any Explanation of Benefits form (EOB), you see the amount billed to the patient and the amount approved by the insurance company, and no one understood what the differrence was. The providers and insurance company listed it as a contract adjustment, but adjustment to what contract. It can't be an adjustment to the patient's contract or the patient's billed amount. So what is it really? In its simpless form it is a kickback, in the form of a cancellation of debt given by the provider to the insurance company. Why would a provider give a kickback to the insurance company? In order to have access to the insured patients the provider has to be listed as on-network. The providers in order to stay in business must have access to the vast number of insured patients. In order to do this they changed the designation of the kickback to a contract adjustment, did not report any cancellation of debts, and continually increased the medical charges to cover the expense of the kickbacks.

If you know of any other explanation of what is going on in the Healthcare Industry please let me know.

Roy J. Meidinger