Medical bills: Cash or Deductible

[imoldernu]

This has probably been discussed here, but I missed it. Anyway... a Wall Street Journal article that poses the question... "Pay cash, or pay as part of the deductible?"

How to Cut Your Health-Care Bill: Pay Cash - WSJ

Excerpt:

As consumers get savvier about shopping for health care, some are finding a curious trend: More hospitals, imaging centers, outpatient surgery centers and pharmacy chains will give them deep discounts if they pay cash instead of using insurance.

When Nancy Surdoval, a retired lawyer, needed a knee X-ray last year, Boulder Community Hospital in Colorado said it would cost her $600, out of pocket, using her high-deductible insurance, or just $70 if she paid cash upfront.

When she needed an MRI to investigate further, she was offered a similar choice—she could pay $1,100, out of pocket, using her insurance, or $600 if she self-paid in cash.

Rather than feel good about the savings, Ms. Surdoval got angry at her carrier, Blue Cross Blue Shield of Arizona. “I’m paying $530 a month in premiums and I get charged more than someone who just walks in off the street?” says Ms. Surdoval, who divides her time between Boulder and Tucson. “I thought insurance companies negotiated good deals for us. Now things are totally upside down.” (more)

 

[rodi]

I understand her anger - that the insurer's negotiated rates are 2 to 9 times higher than the cash rates. One of the few benefits (in theory) is the negotiated rates.

Fortunately, that hasn't been my experience. My son was sent to a non-Kaiser facility for some specialty care last year - the Kaiser negotiated rate was 1/3 the cash rate. I know because they insisted on cash up front... and tried to charge full freight till I
pushed for the negotiated rate. (Referring Kaiser doc had warned me to do this.) Made a huge difference.

I would be very upset if my insurer was getting charged so much more.

 

[pb4uski]

I had not heard of this. Just goes to show you how screwed up our current system is. We need to blow it up and start anew.

 

[GrayHare]

Due to negotiated rates the price for a given service can vary widely. I've offered cash payments, sometimes the provider accepts it, sometimes not, and sometimes I suspect even they don't know how much the rate they've negotiated is.

 

[audreyh1]

Yes - I think I've run into this already this year. I think a colonoscopy was cheaper for cash than if they filed the paper work with the insurance company. We don't know what the final numbers are. I'll have a better idea then.

Facilities/hospitals have decided cash is king and trumps filing insurance claims?

 

[meierlde]

Yes - I think I've run into this already this year. I think a colonoscopy was cheaper for cash than if they filed the paper work with the insurance company. We don't know what the final numbers are. I'll have a better idea then.

Facilities/hospitals have decided cash is king and trumps filing insurance claims?

Actually its both the cost of doing the paperwork and the delay in payment. You see this on lab tests as well where if you pay by creditcard at an independent lab the costs are much less than if run thru the insurance system. If you think about it how much does a facility save by getting paid before hand with a credit card, and saving a lot of work in the back office.

 

[Gone4Good]

We've heard that you can negotiate a better rate when paying cash but we've never actually been able to realize any savings that way. Maybe if you're dealing with a small-town doctor who handles everything from the procedure to the billing you can find the right person to negotiate with. But in our experience nobody knows what anything costs and nobody is in a position to guarantee you a rate. It's pretty maddening. We've spent hours on the phone and never gotten a straight answer.

I know people say it works. It just hasn't worked for us.

 

[zinger1457]

My experience is very limited, just regular doctor office visits and standard blood work at the lab, but the insurance negotiated rate for those services are already so low I couldn't imagine getting a lower rate for paying cash. I know the lab I use (Sonora Quest) does show 'discounted self-pay' rates for various blood test on their web site and the ones I checked were much more than the negotiated rate from the insurance company.

 

[Gone4Good]

I just remembered, the last time I went to the doctor I asked if I could pay on my way out instead of getting billed and they told me I'd have to wait for the bill. It turns out, they had no idea what I owed. They've outsourced the billing to a third party. So even if I wanted to negotiate a cash rate with the billing company, I'm not sure how that information would get communicated or coordinated with the doctor's office. It's all six degrees of separation.

 

[audreyh1]

My colonoscopy scenario was talking to a major hospital. We were trying to determine the facility fee.

 

[donheff]

So, if you paid cash couldn't you still submit the bill to your carrier for reimbursement?

 

[pb4uski]

Yes, why not if it is an item that is covered? And it it isn't covered then submit it for credit against your deductible.

 

[karen1972]

You can negotiate with some of them, but yeh most use 3rd parties.

One new experience I had this year was the hospital sent me a bill with a 15% discount on top of the negotiated rate if I paid in the first 30 days, that was a nice surprise. The interesting thing will be how that is handled as part of my deductible as my insurance company thinks I paid that extra 15% so we shall see if the hospital notifies the insurance company of the delta.

Another interesting note is that I downloaded the healthmate app from United Health care and you can actually put in procedure and then select individual doctors and it finally shows you the costs.. and things vary very wildly, say a standard blood test ran anywhere from $219 to $589 across 50 doctors within a 5 mile radius.

Lastly, I always ask the cash price of drugs if I have a co-pay especially for generics. I often find the cash price is $2.70 or $5.40 for something they would have billed me $10.. its a convenient way for people to make money on you if your not paying attention...anything on those $4 lists.

 

[pb4uski]

Good info. Some of our local hospitals will offer an additional discount of 10-20% for immediate payment but only if you call and ask. I have many times called and asked and then just put it on my credit card and get an additional 2%. Some hospitals won't budge though and don't offer a discount.

 

[Gone4Good]

Another interesting note is that I downloaded the healthmate app from United Health care and you can actually put in procedure and then select individual doctors and it finally shows you the costs.. and things vary very wildly, say a standard blood test ran anywhere from $219 to $589 across 50 doctors within a 5 mile radius.

That's awesome and long overdue. I thought the ACA required health providers to disclose prices but I've never seen it. Hopefully this is just the beginning.

 

[Tadpole]

I've always heard that people who pay cash, pay more. If I understand the example, this is a person with a high deductible. I cannot help wondering if doctors are afraid of collection or cash flow problems if they let the individual get out before paying. For example, a patient might send in the minimal amount sporadically. Getting less money up front might, in the long run, be better for the practice's cash flow and help reduce personnel costs (perhaps).

 

[Gone4Good]

Good info. Some of our local hospitals will offer an additional discount of 10-20% for immediate payment but only if you call and ask. I have many times called and asked and then just put it on my credit card and get an additional 2%. Some hospitals won't budge though and don't offer a discount.

10-20% actually isn't that much when talking about medical care. Last year the the prices our health providers billed averaged out to be 7 times higher then the price we paid based on our insurance "negotiated rate." So in order for us to go with a "cash price" vs. submitting it to insurance we'd need to see something like a 75+% discount to make it worthwhile. Of course you can't even know which price is better because you don't know what the negotiated rate is ahead of time.

I don't know if this is common, but here's an example of our billed vs. negotiated prices . . .

 

[pb4uski]

But you misunderstand... the 10-20% is based on the amount that I owe...insurer's negotiated rates less what insurance pays (the $133.89 in your example), not the rack rate (amount billed or $878.32). So in your example, I would call and settle the bill for $107 to $120.

Note that I was commenting on karen1972's post that the hospital bill that she received had "a 15% discount on top of the negotiated rate if I paid in the first 30 days" and I was simply agreeing and letting people know that it is a common practice but at least in my area you have to call and ask for the discount in order to get it.

So if I was looking to pay the provider directly, I would be willing to pay $107 to $120 which is an 86-87% discount off the rack rate.

 

[Car-Guy]

I'm certainly not a fan of medical insurance companies. Far from it. However, I've never heard of this in practice but I guess it might work in some scenarios. In our case, we seldom pay more than our office visit copay ($25) since most standard/common tests are covered at 100%. Even when we do have to pay for something, it's only 20% of the insurance companies negotiated rates. If we ever hit our annual co-insurance limit (3k) the insurance pays 100% of everything else. If you ever experience 6 digits in medical bills in one year, your 3k co-insurance will seem cheap and I doubt you could come anywhere near beating that by paying cash.

 

[Beldar]

We've heard that you can negotiate a better rate when paying cash but we've never actually been able to realize any savings that way. Maybe if you're dealing with a small-town doctor who handles everything from the procedure to the billing you can find the right person to negotiate with. But in our experience nobody knows what anything costs and nobody is in a position to guarantee you a rate. It's pretty maddening. We've spent hours on the phone and never gotten a straight answer.

I know people say it works. It just hasn't worked for us.

This has been our experience as well, with both the Dentist and Family Physician's office. They both want the full billed rate no matter who pays it.

_B

 

[Gotadimple]

My colonoscopy scenario was talking to a major hospital. We were trying to determine the facility fee.

Audrey,
Do you have a need to stay overnight? Colonoscopies are ambulatory surgery (takes just a few hours). Are there no Ambulatory Surgery Centers near you? They might be less expensive. Your health insurance may also have a comparison tool you can use to check prices.

- Rita

 

[audreyh1]

Audrey,
Do you have a need to stay overnight? Colonoscopies are ambulatory surgery (takes just a few hours). Are there no Ambulatory Surgery Centers near you? They might be less expensive. Your health insurance may also have a comparison tool you can use to check prices.

- Rita

No. This was for an outpatient procedure. All the endoscopy centers here are associated with a major hospital.

 

[Alan]

So, if you paid cash couldn't you still submit the bill to your carrier for reimbursement?

This is what we do if we need treatment while traveling abroad so I think it should work domestically.

I have a friend who retired from the same company as myself and has the same BCBS PPO. Last year while in Vienna his wife took ill and needed to go see a doctor who prescribed some pills. They paid for the doctor visit and the prescription, filed a claim when they got back and to his pleasant surprise got fully reimbursed.