General Question

inshelp22's avatar

What happens if I manually submit a "cash pay" claim to my health insurance provider?

Asked by inshelp22 (1 points ) September 7th, 2012

I was referred by my doctor to get an MRI. He gave me two places to go to, one of which he said has a cash price of $175 and another one right around the corner that he knows accepts my insurance. I made my appointment with the second place. They told me that since I did not meet my deductible I would be responsible to pay the negotiated rate of $348. I obtained the procedure billing code and call my insurer to confirm it. The price for that procedure was indeed $348. The agent also told me that all providers in my area that take my insurance are bound by my negotiated rate. I asked if the first place with the cash discount was in network and asked how much they would charge to do that same procedure code. The price was indeed $348, which is more expensive than the cash price!

This means that if I don’t keep my mouth shut and tell them I have insurance I will end up paying $348! The agent said they are required to charge me that. My question is that if I pay the cash price and then submit the receipt with the claim form to the insurer what will happen. The scenarios are:

1) The insurance company will credit $175 to my deductible and I owe nothing

2) The insurance company will credit $348 to my deductible and I owe nothing

3) The insurance company will credit $348 to the deductible and I will owe ($348—$175)

The agent said I would be billed and it would count toward my deductible. He did not seem too knowledgeable so I am not sure. If number three is indeed true that is kind of sad that you pay for insurance then are forced to pay more because you are paying for insurance…

A second question I have is the $175 MRI place said they regularly charge $1500 for the procedure and the $175 is a “discount”. Is this inflated price a sneaky way to write off losses as in “We normally charge $1500 but the insurance company only paid us $348”

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7 Answers

Cupcake's avatar

There is another option – that $0 would count toward your deductible.

marinelife's avatar

I think that you should use your insurance and just bill it.

inshelp22's avatar

@Cupcake

I know that is the obvious option and what I plan to do.

@marinelife

If I bill it to the insurance directly it will cost me $348, more than the cash price of $175

wundayatta's avatar

It all depends on how much health care you may need this year. If you end up fulfilling your deductible, you’ll wish you’d spent the $348, since you would have saved that much, and more, depending on how much over your deductible you spent.

On the other hand, if you don’t anticipate meeting your deductible, then spend $175 out of pocket, and deduct nothing from your deductible.

A proxy measure for potential health care utilization is age. If you are under 35, spend the $175. Above, spend the $348 and count it towards your deductible.

If this MRI is for something that will potentially require a lot of care, and if you feel like you probably have a condition requiring care, then spend the $348. Otherwise, if you think this is probably a wild goose chase, go for the $175.

This also depends on cash flow. If you have cash flow problems, you may have to do $175, even if you are very sick, simply because you don’t have the cash now for $348. Although, if you are sick, then you will soon be spending $1000 (or whatever your deductible is), which you also don’t have, so I guess it doesn’t matter. Tell them to bill you the $348 and you’ll pay it when you can.

Of course, this is why we need single payer. This kind of calculation is nuts, and how can you know how sick you are? This is why you go to the doctor in the first place. This is a form of moral hazard (as they say in the insurance industry). Perverse incentives encourage you to purchase insurance only if you need it. Supposedly, when everyone has insurance, this kind of thing won’t be necessary. But for now…. well… just how sick are you?

marinelife's avatar

@inshelp22 Rught, that is their negotiated price with the insurance company.

janbb's avatar

I would pay the cash price of $175. and then submit. I don’t believe they will charge you for the difference between that and $348. I think they will likely take $175 off of your deductible but that is just my opinion. Nobody but the company knows exactly what they will do.

wundayatta's avatar

I would be surprised if they took $175 off your deductible. If you report it to insurance, then the hospital probably is legally required to charge you the rate they have negotiated with the insurer. I would guess that you can only get the $175 rate, if the hospital doesn’t know you have insurance—and they never find out. Which means that if you ever try to use insurance at some future time, they will check to see that you are newly covered, and if they find out coverage has been in place for a while, during the time they provided other services to you, they may back bill you for what you didn’t pay in the past. They may have to do this, or else break their contract with the insurer. But this is just speculation. I hope you could get away with what is best for you.

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