Best School District & Best Medical Care

[Bob Orts]

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Originally posted by csgray

Macuu222,
Even worse, you can be taxed based on the first bill you get (the huge bill before the insurance company talks it down by 2/3rds). We had an emergency room physician bill at an astronomical rate, which was reduced by 2/3rds because of a preferred provider deal with our insurance company. But he still billed us for the tax on the higher amount, and threatened to turn us over to a collection agency and trash our credit if we didn't pay it.

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Carol, the GET can only be charged based on the PAID amount, (insurance & patient), not the billed amount. If the bill was $500 but the agreed insurance was $300, and the insurance company paid $200 and you paid $100, the GET is only allowed on $300, the amount Received. The Doctor has agreed on the rate, so what they bill has no meaning on the GET as they are only paid what they already agreed to accept for that procedure. Further, the insurance company may have a GET pass-through (you pay the GET) or the amount they paid could have included the GET on their portion. You may want to contact the insurance company and have them send you the policy. The Hawaii Dept of Taxation has a bulletin specifically on this issue.