Do you have to use your insurance plan to pay for healthcare? Can you pay cash instead?
Most people have long thought their insurance gives them access to lower prices — but that’s no longer true. We have been telling people for years that they might easily save money paying cash, yet this knowledge is not widespread. With rising price transparency from hospitals, and with higher and higher deductibles, though, more and more people are getting the message: In a lot of cases you can save a lot of money by paying cash.
For example, a Trilliant researcher described on LinkedIn how she asked for a cash price for an ultrasound, and her cost went from $900 to $390.
If you don’t have insurance information on file with an insurer, and you say you want to be a cash customer, you’re O.K. (I have done this myself, getting an MRI for $450 cash instead of the $2,400 I expected.) But a lot of people say they have the impression that it’s not O.K. — with receptionists and other office workers saying with great authority that you cannot pay cash.
Some practices refuse to accept cash, citing various reasons. If you are insured and say you aren’t, that’s a thing some providers will describe as “insurance fraud.” Beyond that, there’s another downside: If you pay cash, the cost will probably not count toward your deductible.
What to do and how to do it, if you want a cash price?
This question comes up a lot in healthcare — in social media, in person, in my inbox and anywhere that health pricing is discussed. There is a lot of conversation online, some of it informed and some not. To wrestle the topic to the ground, I asked the members of an online group who are some of the smartest minds in U.S. healthcare: What is O.K. and what is not?
‘Complete BS’
Told you can’t pay cash? “This is complete BS per Phil Eskew who is DO/JD/MBA and he always refers to the HITECH Act,” Dr. Jeff Gold, owner of Gold Direct Care in Salem, Mass., wrote. “The only plans where it may be an issue is with government plans like Medicare or Medicaid.”
Catherine Dickerson is in-house counsel for Green Imaging, which works with 1,400 imaging facilities in 49 states. Green makes it possible for self-pay patients to buy scans from under-capacity centers, which are then interpreted by Green Imaging doctors. This saves patients and payers.
Dickerson wrote: “HIPAA and Hitech (2013 omnibus) privacy regulations give patients control over how their [Personal Health Information] is handled. If a medical facility refuses to give a cash price because the patient has insurance, they should be advised: Patients are entitled to request that their PHI be restricted (i.e. they are not required to disclose their insurance; caveat: the provider must be paid in full)…. See Section 13405 of Subtitle D of the HITECH Act (42 USC 17935).
“Further, the Department of Health and Human services says, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule requires covered entities (health plans, health care clearinghouses, or health care providers that conduct standard electronic transactions) to allow individuals to request that a covered entity restrict the use or disclosure of their PHI for treatment, payment, health care operations.
“If one gets push back from the facility, saying they are contractually bound to use insurance, know that all the [Big Insurance companies like Blue Cross, UnitedHealth, Cigna, Aetna, Humana] contracts have a clause that states if any provision of this agreement violates law, that provision is excluded.
“Requiring use of a patient’s PHI is unlawful and excluded. One wouldn’t think educating the facilities is necessary but it often is and we have found great success with relying on the statute.
“It also helps to point out that previously, fines up to $25,000 maximum could be levied. Now the fines are tiered and could be as much as $1.5 million in fines for just a single HIPAA violation.”
How it usually happens
Dr. Owen Muir, a psychiatrist who treats children and adults at Fermata Health and writes about healthcare at TheFrontierPsychiatrists, wrote: “So to be clear, as a provider, the only way to make this work is to disclose upfront that if the patient discloses their insurance information and we’re in network with that insurance we are obligated to bill that insurance, but if we don’t know what their insurance is because they refused to disclose that, then we have to respect their choice to keep their insurance coverage private, and offer them a cash price?
“Our practice is to accept a patient’s insurance when they have it. Given, many of the services we’re offering are not included in the plan’s covered options, like transcranial magnetic stimulation beyond once or twice a day. We often subsequently will offer a financial hardship agreement that we will translate into a cash price that is as generous as we are able to be.
“It’s not that we are gatekeeping lower prices, we’re asking for documentation of a financial hardship, very broadly defined, in order to offer a lower price that doesn’t violate a ‘favored nations status’ contract with a payer.
“I hadn’t thought of just being forcefully and blissfully unaware of the insurance status of a patient for the ability to get a cash price communicated, but that seems like a valid strategy.”
‘A conundrum’
Cindi Patton, who has been an independent patient advocate for 12 years at Pathfinder Patient Advocacy, wrote: “The issue you raise is an important one. Just because someone has health insurance does not mean they are required to use it. However our medical industrial complex is so entrenched with the idea that you either have it or don’t have it that this middle ground is a conundrum for the average front office person.
“Some years ago I had an individual Marketplace plan and my rheumatologist did not (at that time) participate with my plan. The front desk asked if I had insurance and I told them I did, but they didn’t participate and I wished to be considered a cash patient. They responded that that was insurance fraud, and I responded that it is only insurance fraud if I paid cash and submitted my super bill to my insurance company for payment as well. (My plan at that time offered out of network coverage only in an emergency.) I had to have a conversation with the office manager before they agreed to provide me the cash patient discount and allow me to pay directly.
“The challenge for the average consumer is understanding this and being able to self advocate. And for the provider simply having the patient sign a waiver that they agree not to bill their insurance so the liability is on the patient and not the provider.
“This would have been 10 years ago and much has changed since then, but in my experience with clients, unless they are seeing a direct primary care or concierge doctor, the notion of choosing not to use your insurance (I liken this to having a fender bender and choosing not to file the claim with your auto carrier) still seems foreign. And the downside for consumers is that even with out of network benefits, if the provider doesn’t participate with one’s coverage, the financial penalty is more severe than simply paying cash, which is usually around a 35% discount.”
Dr. Paula Muto, founder and CEO of Uberdoc, a company that made a web app that connects patients to specialists for a transparent price using a health savings account or credit card, wrote: “When we created Uberdoc we made sure the patients and physicians sign the appropriate permissions to proceed outside insurance. It’s one of the first things we did to make sure any doctor who signed up for Uberdoc would be compliant. Direct pay is better, faster, and cheaper. Less data to collect, immediate payment, and with all of the high deductible plans, a convenient option. Ideally if health plans could eliminate having to process routine office EM codes, they’d save billions.”
‘Crisis of affordabililty’
Stacey Richter, host of Relentless Health Value and co-president of Aventria Health Group, wrote: “I really believe there’s an imperative for practices to recognize the reality of the current crisis of affordability their patients are experiencing, and take at least some pretty basic steps to help when possible (like ensuring those who want to pay a lower cash price are able to do so). Especially when it’s actually a win/win for them as well!
“The last interview I did with Marshall Allen was on the topic of helping ‘regular’ practices accept cash. This convo here is much more nuanced about some of the points that Marshall brings up, but for the 101 on this + some good points on just being a practice open to accepting cash because they are worried about patient affordability, and the opportunity to cite Marshall, here you go: https://relentlesshealthvalue.com/episode/ep425-three-ways-for-regular-clinical-practices-to-take-cash-when-its-cheaper-for-a-patient-than-using-their-insurance-with-marshall-allen
Emily Noll, a workplace wellness consultant in Montgomery County, Md., wrote, “The average person contacts a new doctor and asks ‘do you take [my insurance]?’ before scheduling an appointment — otherwise they get to it by the end of the phone call. Now-a-days, a person might request a new appointment via the doctor’s website; via the online form they disclose what insurance they have. If the doctor is out of network, a person may ask if there are self pay options and doctors are usually amenable to this.
“If the doctor doesn’t take Medicaid, they say there are no self-pay options because you already disclosed you have state insurance. I have seen this happen with pediatricians as well as therapists (where waitlists for therapists who accept self-pay are much quicker than those who don’t) and it’s disgraceful. One community counseling clinic, who has a sliding scale fee for people in hardship, literally said to a friend of mine that they can’t offer her the sliding scale fee because she already disclosed in the online request form that she had Medicare. She asked ‘can’t we just pretend I didn’t tell you’ and they said ‘no because we could get in trouble with the state.’
“No one advised that she could withdrawal her online request form. The average person is not going to know to ask for their PHI to be restricted or to be able to quote these laws. So, while it’s nice there are some protections, I’m not hopeful that most people would know how to pull this lever.”
Cristin Dickerson, the founder and CEO of Green Imaging, added that Medicare and Medicaid cash payments are a little trickier than a cash payment from the self-pay patient or one who is insured: “Even with C.M.S. (Medicare/Medicaid), you can sign an ABN and do the same.”
An Advanced Beneficiary Notice, she explained, “is a C.M.S. form. C.M.S. providers issue them when they think a service will not be covered, maybe Medicare has not approved a new technology. We issue them because we are not a C.M.S. provider, the patient electing to use us acknowledges they will be financially responsible.” The notice can be found here.
The deductible issue
That cash payment is generally not applicable to your deductible. But two states, Tennessee and Texas, have protections for people who want to get lower prices and pay cash, and also have those cash payments count against their deductible.
“New legislation passed in these states allows for patients to apply cash price services to their deductible if the cash rate is lower than the average in network price. In other words, if a patient finds a cash-pay price that’s cheaper than what their in-network providers are charging, their insurance company must apply that expense towards the patient’s deductible,” Mike Botta writes for Sesame.
“Why? Because as demands for more pricing transparency in healthcare increase, it’s becoming more and more evident that cash prices are often better than insurance negotiated prices, and that price transparency drives health costs down for patients.”
There is an effort to make national legislation effecting this same policy.
