Price Transparency and Payment Options

Understanding your out-of-pocket costs is key when making health care decisions.

High Deductible Health Plans (HDHP) continue to rise in terms of the top health care plans purchased.  Reference: Kaiser Family Foundation: 2019 HDHO Benefits Survey

For HDHP plans 2020 minimum deductibles are $1400 for individual and $2800 for families.  Maximum deductibles $6900 for individuals and $13,800 for family. Reference: Thomson Reuters: HDHP maximums and minimums

A consumer of this plan is responsible for all out of pocket costs (copay, coinsurance and deductibles) before insurance will kick in.  For a more in depth understanding of HDHP plans, reference: Savvy Health Care Consumer Health Care Enrollment 2020: POS, EPO and HDHP Plans

With the consumer bearing the costs of their healthcare, pricing transparency is key.  

How does a consumer get estimated costs for services?

  • Your insurance company usually has a patient portal where you can get an estimated costs for services.  See example below:

Keep in mind this is a general estimate and assumes the use of in-network providers and facilities. If on the patient portal in most cases, it considers the plan you have purchased to provide out-of-pocket costs, copays and coinsurance. 

Another factor is that even if it is an in-network facility, the rate that your insurance company has contracted for that provider and facility may also impact cost.

Example: Hip replacement is $30,390 based on the Medicare fee schedule or 100% but the contract with the physician is 130% or 30% above the Medicare amount and the hospital is 145% or 45% above the Medicare amount.

Physician – $2,422 + the additional 30% $726.60 = $3,148.60

Hospital –  $26,940  + the additional 45% $11,223 = $38,163

TOTAL: $41,311.60 a difference of $10,921.60

  • This is why it is important to request an estimate from the physician’s office and the facility where you may be having surgery.  When requesting the estimate always ask the group if the estimate includes the contracted rate they have negotiated with your insurance provider.
  • If there is no portal and you cannot get an estimate from the physician or facility you can use the cost estimate tool from Fair Health Consumer: FHC Cost Estimator

The FHC requires knowledge of Current Procedure Terminology (CPT) codes.  These are the 5-digit codes physicians and facilities used to bill you and or your insurance company. You can ask the provider office and facility which CPT codes they will use for your procedure so you can input into the calculator for a more precise estimate. If you received an authorization for your service, the CPT codes may be on the authorization letter you received from your insurance company. Also, the FHC is a baseline estimate and may not take in the contracted rate as mentioned in the example above.

What are my options to pay for out of pocket expenses?

A practice will usually require you to sign a financial responsibility form.  The form varies from practice based on their policies but usually covers: 

  • Policies for payment on missed appointments.
  • Time frames to cancel to avoid payment.
  • Billing of copays, deductible and co-insurance (cost share). Refer to Savvy Health Care Consumer Out of Pocket Costs
  • Knowledge of insurance policy including authorization policies for services.
  • Registration policy for using paper forms or provider portal.
  • Balances due and time frames to pay.
  • Interest rates that may apply if balance not paid off by aperiod of time.
  • Non-payment and option to send youto collections.

Most provider groups do require that you sign this financial agreement. It is important to read this document throroughly and evaluate against your plan or if you are self-pay and your ability  to pay on the terms outlined in the document.

Do provider groups have payment plans?

They should cover this in the financial form, but if not, ask to speak with the billing department to confirm. Usually provider groups will work with you on a plan, but there may be restrictions in terms of a time frame of balance paid and interest may apply.

Don’t be afraid to ask the provider’s billing department to work with you.  Example if you pay off in 30 days can you negotiate a lesser rate. It never hurts to ask about options that may work for your current situation.

Groups may also recommend the CareCredit card, which is a card specifically used for medical expenses for both personal and pet medical expenses. CareCredit also offers finance options with no interest if the balance is paid in 6, 12, 18 or 24 months. They have over 200,000 providers enrolled.  To read more and to confirm if your provider participates, refer to CareCredit Learn, Apply and Use

An informative article that outlines additional options and tips is from: Nerdwallet: How to pay off your medical bills.

Overall know your insurance plans, use the tools for acquiring cost estimates, read and ask questions regarding the financial policy so you know your options and can make savvy decisions regarding the cost of health care services.

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