Amounts Generally Billed (AGB) Calculator
This tool helps estimate the maximum amount a patient eligible for financial assistance may be charged by a hospital, based on the hospital's Amounts Generally Billed (AGB) percentage derived from its historical billing data for insured patients (Medicare, Medicaid, and private insurers).
Enter the patient's total gross charges for their hospital services and the hospital's AGB percentage (typically published by the hospital). The calculator will determine the maximum AGB amount for that patient.
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Understanding Amounts Generally Billed (AGB)
What is AGB?
Amounts Generally Billed (AGB) is a concept mandated by the Affordable Care Act (ACA) in the United States. It sets a limit on the amount that hospitals can charge patients who are eligible for the hospital's financial assistance policy. The purpose is to ensure that these patients are not charged more for emergency or medically necessary care than the hospital generally bills its insured patients.
How is AGB Calculated?
Hospitals typically calculate their AGB using the "Look-Back Method." This involves looking back at a specific 12-month period and calculating the average ratio of the amounts paid by Medicare, Medicaid, and private health insurers for emergency or medically necessary care to the corresponding gross charges for that care. This ratio is expressed as a percentage.
The formula used by this calculator for a specific patient is:
Patient's Maximum AGB Amount = Patient's Total Gross Charges × (Hospital's AGB Percentage / 100)
For example, if the total gross charges are $10,000 and the hospital's AGB percentage is 25%, the maximum AGB amount the patient can be charged is $10,000 * (25 / 100) = $2,500.
Why is AGB Important?
For patients who qualify for financial assistance, understanding the AGB can help them know the maximum they might owe, even if their gross charges are significantly higher. It provides a benchmark to prevent overcharging for eligible patients.
AGB Calculation Examples
Click on an example to see a typical AGB calculation:
Example 1: Standard AGB Calculation
Scenario: A patient receives services with $20,000 in gross charges at a hospital with an AGB percentage of 30%.
Calculation: AGB Amount = $20,000 × (30 / 100) = $6,000
Conclusion: The maximum amount the financially assisted patient can be charged is $6,000.
Example 2: Lower Gross Charges
Scenario: A patient's gross charges are $5,000. The hospital's AGB percentage is 40%.
Calculation: AGB Amount = $5,000 × (40 / 100) = $2,000
Conclusion: The maximum AGB amount is $2,000.
Example 3: High AGB Percentage
Scenario: Gross charges of $15,000 at a hospital with a high AGB percentage of 60%.
Calculation: AGB Amount = $15,000 × (60 / 100) = $9,000
Conclusion: The maximum AGB amount is $9,000.
Example 4: Low AGB Percentage
Scenario: Gross charges of $30,000 at a hospital with a low AGB percentage of 20%.
Calculation: AGB Amount = $30,000 × (20 / 100) = $6,000
Conclusion: The maximum AGB amount is $6,000.
Example 5: Small Bill
Scenario: A patient has gross charges of $1,200. The hospital's AGB is 35%.
Calculation: AGB Amount = $1,200 × (35 / 100) = $420
Conclusion: The maximum AGB amount is $420.
Example 6: Large Bill
Scenario: Gross charges are $50,000. AGB percentage is 28%.
Calculation: AGB Amount = $50,000 × (28 / 100) = $14,000
Conclusion: The maximum AGB amount is $14,000.
Example 7: AGB = 50% (Half of Gross)
Scenario: Gross charges of $8,000. Hospital AGB percentage is 50%.
Calculation: AGB Amount = $8,000 × (50 / 100) = $4,000
Conclusion: The maximum AGB amount is $4,000.
Example 8: AGB = 100% (Unlikely, but possible)
Scenario: Gross charges of $10,000. Hospital AGB percentage is 100%.
Calculation: AGB Amount = $10,000 × (100 / 100) = $10,000
Conclusion: The maximum AGB amount is $10,000. (Note: AGB is usually less than 100%).
Example 9: Zero Gross Charges (Input Validation)
Scenario: Patient's gross charges are $0. Hospital AGB is 30%.
Calculation: AGB Amount = $0 × (30 / 100) = $0
Conclusion: If gross charges are zero, the AGB amount is zero.
Example 10: Zero AGB Percentage (Unlikely, but possible)
Scenario: Gross charges are $15,000. Hospital AGB percentage is 0%.
Calculation: AGB Amount = $15,000 × (0 / 100) = $0
Conclusion: If the AGB percentage is zero, the maximum AGB amount is zero.
Frequently Asked Questions about AGB
1. What does AGB stand for?
AGB stands for Amounts Generally Billed.
2. Who does the AGB limit apply to?
The AGB limit applies to patients who are eligible for financial assistance under a hospital's financial assistance policy (FAP).
3. What type of care is subject to the AGB limit?
The AGB limit applies to emergency and medically necessary care provided by the hospital.
4. How do I find a hospital's AGB percentage?
Hospitals are required to include information about their AGB in their financial assistance policy (FAP), which should be publicly available on their website and in printed form. It might be expressed as a percentage or a calculation methodology.
5. Is the AGB percentage the same for all services at a hospital?
Typically, a single AGB percentage is calculated for all emergency and medically necessary hospital care using the "Look-Back Method." However, specific hospital policies may have nuances.
6. Does the AGB limit mean I won't owe anything if I qualify for financial assistance?
Not necessarily. The AGB is the *maximum* amount you can be charged. Depending on your income level and the hospital's FAP, you might receive a discount resulting in an amount owed that is less than the AGB, or even qualify for a full write-off (owing $0).
7. Is the AGB amount the same as the Medicare or Medicaid rate?
Not exactly. The AGB is *based on* the amounts paid by Medicare, Medicaid, and private insurers combined, averaged over a look-back period. It's a derived percentage, not a direct application of any single payer's rate schedule.
8. Can a hospital charge a financially assisted patient more than the AGB?
No. For emergency or medically necessary care, a hospital generally cannot charge a patient who qualifies for financial assistance more than the calculated AGB amount for those services.
9. What are "Gross Charges"?
Gross charges, also known as the chargemaster price, is the full, sticker price for a healthcare service before any discounts, insurance adjustments, or financial assistance are applied. Very few patients actually pay the gross charges.
10. How does the "Look-Back Method" work?
The Look-Back Method calculates the AGB percentage by dividing the total amount paid by Medicare, Medicaid, and private health insurers over a defined period (e.g., the prior fiscal year) for specific types of care by the total corresponding gross charges for that same care during the period. This ratio (expressed as a %) becomes the AGB percentage for the subsequent period.
