What I learned after calling every hospital in California?
I spent weeks calling every hospital (about 400) in California looking to estimate cash prices for a for a few procedures that I needed or had in the past. Why you may ask? I had this inclination that I was massively overpaying for services that I needed in the Bay Area and I was. I wanted to know what was the lowest price I could pay in California for the same procedure. Since I’ve always had insurance, albeit in the last few years a really crappy High Deductible Health Plan (HDHP), I wanted to try to understand how a hospital would respond to a patient asking about self-pay rates.
On those calls, a few things stood out to me:
- The lowest prices for the procedure were Medicare reimbursement rate. Very few hospitals offer these rates and they were clustered in Southern California.
- Hospitals don’t want patients to pay cash. If you have insurance and you inform them of your insurer, many hospitals will not share their cash rates, even if they are substantially better. Ironically, or unironically, hospitals most worried about consumers paying cash were the ones with the best cash rates.
- If you want to estimate pricing for a procedure, it’s often best to call both the billing department and the hospital’s financial counselor.
- Cash discounts are generally set up by the hospital system; so, the hospitals within the same system generally have similar discount rates. This can greatly limit the number of hospitals you have to call to compare prices.
- Financial counselors within the hospital system are not always told how a hospital calculates its cash rates. This means that you’ll have to know the CPT codes for your procedure to price it out at many hospitals. The Current Procedure Terminology system (CPT) gives many medical procedures a unique code. It can include a modifier code, which means that services even with the same CPT can vary by thousands of dollars. Ask for prices of all modifiers within a CPT coding designation.
- Larger hospital systems had higher list and cash prices, but also had better billing departments that could price out procedures more thoroughly.
- Hospitals systems in Northern California have worse cash rates and higher list prices than those in Southern California.
- Rural areas are a mixed bag. Some hospitals in rural California have list prices close to cash prices in other regions. Some hospitals in rural California have higher prices than in urban California and poorer cash discount rates.
Pro-tip 1: Always check cash prices before choosing to pay with insurance. Target smaller hospital systems when looking to pay cash.