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Question 3 of 5 in Typical Health Care Features
What are some common cost-containment procedures used by insurance companies?

In order to curtail health insurance costs from spiraling out-of-control, most insurance companies have instituted a variety of cost-containment features to their Individual and Group health insurance plans. Common cost-containment procedures, under which coverage may be denied or restricted, include:

1. Same day surgery admission - instead of allowing a person to be admitted the day before surgery which results in a charge for an additional day of hospitalization charges, the patient is required to be admitted the day that the surgery is to be performed.

2. Pre-admission testing - before authorizing hospitalization or surgery in a non-emergency situation, additional testing to determine whether hospitalization or surgery is required must be performed.

3. Outpatient surgery requirement - many surgical procedures may now be performed on an outpatient (non-hospitalized) basis reducing the need for reimbursement of hospitalization costs.

4. Second opinion - before procedures, care, and related medical expenditures will be authorized, the insurance company requires a second opinion from a qualified health care practitioner.

5. Prior consent for hospitalization - the insured is required to present to the insurance company the particular course of treatment proposed by the health care practitioner before authorization for coverage will be provided.

7. Limitation to "usual, customary and reasonable" charges - such a limitation enables the insurance company to determine that health care procedures, services and related medical expenditures are outside or exceed the "usual, customary and reasonable" charges for particular courses of care or procedures used for treatment of particular conditions or exceed the costs for a given geographic territory.

• Deductibles - The amount you yourself have to pay out-of-pocket before reimbursement of your expenses from the insurance coverage. It is usually a flat dollar amount. The higher the deductible, the lower the premium.

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