Hospitals and other health service providers more and more are offering cash prices at a great deal less than what they charge through insurance. As consumers get better at shopping for health care, many are finding this trend: an increasing number of hospitals, outpatient surgery centers, imaging centers, and pharmacy chains will give them large discounts if they pay cash, and do not use insurance.
An example is Nancy Surdoval, a retired lawyer: she needed a knee X-ray in 2015. Boulder Community Hospital in Colorado told her the price was $600, out of her pocket, using her insurance (with its high deductible), or only $70 if she paid cash upfront. When an MRI was needed to investigate further, she was offered a very similar choice—she could choose to pay $1,100, out of pocket, using insurance, or $600 if she paid with cash.
Finding the negotiated rates for similar services is hard since many insurance contracts prevent payers and providers from disclosing them. However, individual plan members can find that information on their Explanation of Benefits statements, so ClearHealthCosts has joined with public radio stations in New York, California, and Pennsylvania, asking listeners to post anonymously exactly what their health provider charged them, what their insurance paid and what they paid themselves. Thousands responded, showing that in a lot of cases, while insurers had negotiated a big discount off the cost the providers charged originally, the rates negotiated were still higher than they would have cost in cash at the same place or a place nearby.
An example of this:“My favorite was the $5,400 MRI at an academic medical center in California,” says Ms. P. “ The Insurance paid around $2,900; the patient paid about 2,500. On paper, it looked like he got a great deal—but he could have paid $725 cash right down the street.” When people see this information, she says, “They don’t behave the same way in the marketplace again.”
When the true prices are seen, it changes the traditional relationships between insurance companies, healthcare providers, and patients.
James Lazarus, a vice president of Advisory Board Co., who advises hospitals on self-pay prices, said offering cash rates that are lower than insurance-negotiated rates could violate contract provisions.
Some providers do keep their cash rates quiet, in fear of losing negotiating power with insurers. Others are eager to have their cash prices known—and see them as a way to compete for business and assist patients who might otherwise not receive care. Boulder Community Hospital hasn’t had complaints from insurers, says Chief Financial Officer Bill Munson. “Patients have the right under federal law to request that we not bill their insurance,” he has said, “and when they do, they have the right to participate in our self-pay program.”Regional Medical Imaging of Flint, Mich., has stated some insurers encourage their plan members to take advantage of its low cash prices. An MRI of the knee costs cash payers $265, but $510 out of pocket for an Aetna member with a high-deductible plan.
Amy Oldenburg, Aetna’s vice president of network and product strategy, says members who find they save money by paying cash “should make the best choice based on their needs.” But, she also says they could be paying for unnecessary procedures and are missing out on an opportunity to have Aetna coordinate their care.
Clare Krusing, a spokeswoman for America’s Health Insurance Plans, an industry group, says its members haven’t reported many instances of cash prices undercutting their insured rates, but when it occurs, “it’s a question for providers—why are they accepting lower rates than they could get through insurance?”The American Hospital Association has stated its members fear large-deductible plans will increase bad debt and leave uninsured patients unable to afford care. Offering discounts helps with both, says Tom Nickels, an AHA executive.
Meanwhile, hospitals have to charge insured patients more to pay for losses on Medicare and Medicaid patients, he says. “Health plans have complained about this for years. We have complained along with them. The government doesn’t pay its fair share.”
Patients who encounter big discrepancies in price are complaining as well—generally to their insurers. Ms. S reports she contacted her carrier repeatedly to ask why using her insurance was costing more than cash. “The standard response was, ‘We can understand why you might be upset about that.’ It was like they were reading a script.”
Jeff Stelnik, senior vice president of strategy, sales, and marketing at Blue Cross Blue Shield of Arizona, says that cases where cash rates are less than its contracted rates are “very infrequent” and that high-deductible plans “are a great opportunity for consumers to make their own decisions.”
Self-pay discounts, however, do present patients with a dilemma: Most insurers won’t count these payments toward their deductibles. So members have to take a guess when they are likely to have a major medical expense each year, or stay healthy and save by paying cash. Ms. S bet she would need knee surgery, so rather than pay $600 for an MRI in Boulder, she went to a doctor at New York’s Hospital for Special Surgery who had treated her before. The MRI there was $2,800, but paying it through her insurance put her over her $3,500 deductible for the year, so the $30,000 she was charged for knee surgery in June was covered in full.
It is up to the individual whether they should pay their plan deductible or pay in cash for health-care services. Every case is different, and it should be thoroughly researched before spending money out-of-pocket. Only you can determine what is best for you in each scenario.
Source: http://yhoo.it/1Tp0I5X
