Negotiating Healthcare Costs - An MRI Quoted at $2,000 Was Only $600 Paid in Cash, Then Reimbursed by Insurance

An MRI that was quoted by a doctor's office and local healthcare sources at $2,000 only cost a patient who paid cash $600. This smaller amount was then reimbursed by insurance. The $2,000 is the amount that would have been billed to insurance if payment was expected from that source. By offering to pay in cash, then turning the bill over to the insurance company for reimbursement, the cost was only $600.

I know, because I was that patient, and the MRI was for my injured knee. The point is that negotiating medical costs by offering to pay cash resulted in a bill of less than 1/3 the amount that would have been billed to insurance. To avoid paying a balance due if the insurance did not cover the full amount, I offered cash to see what would happen, and this was the result.

Research in my area has resulted in quotes of a 20% fee reduction for cash, or more, from some medical providers when a cash payment is offered.

It appears that this type of billing situation and pricing has resulted from the upward spiral of costs. The insurance companies only pay a portion of the total bill, so the medical providers make a larger bill to get a larger total amount paid. It can remind one of a game.

Medical providers bill for a larger and larger amount, to get paid a larger amount when a portion of the bill is paid, to cover their costs. Insurance companies pay only a portion, expecting that the bill will be "inflated" and the cycle goes on and on.

Paying cash, to get a low price and avoid large balances due that are not covered by insurance, is possible when someone has the cash available and the amount is affordable. But larger bills, for surgeries, make this difficult.

However, if someone is not covered by insurance, due to a pre-existing condition, sometimes there is no choice but a cash payment. Some people turn to home equity lines of credit to raise the money for expenses like this. Others are able to use credit cards if their limits are high enough to allow it. As mentioned in previous posts, there is also the option of medical tourism, since overseas surgeries may be as low as 1/5 or less the cost of surgery in America.