Health Provider Cash-Pay

What is cash-pay?

In many states, you can opt-out of health insurance and pay cash for health services. Hospital cash-pay (or self-pay) is when you pay directly for health services. Often, cash-pay discounts are substantial between 30-80% off the chargemaster or hospital sticker prices. Usually with cash-pay you need to pay at the time of service or within 30 days of receiving a service. It's easiest to shop around when you cash-pay as health providers have to generally inform you of prices ahead of time as you either pay ahead or provide a deposit at time of treatment.

What types of discounts are available?

The type of the discount usually comes in one of three forms: (1) medicare, medicaid or government provider rate, (2) discount off of hospital sticker prices (gross charges before discount) or (3) amounts generally billed (AGB) (which is the average reimbursement for that service from all payers). Usually the Medicare Reimbursement rate is the best cash-pay discount.

Keep in mind that some hospitals charge 10-100 times of the Medicare Reimbursement rate. So while a discount of 70% may sound great, it may still be substantially higher than the Medicare reimbursement rate. Check out the Medicare reimbursement by service on the main search.

The Affordable Care Act mandated that all hospitals must provide you a rate less than the amounts generally billed (AGB) if you qualify for financial assistance, usually under 300-400% of the Federal Poverty Line (FPL). You can can check if you qualify for financial assistance here.

Concepts and Definitions:

Amounts Generally Billed (AGB): The amounts generally billed is a measure of the average reimbursement a provider gets from most, if not all payers, to the hospital. The more government payers that a hospital has, generally the lower the AGB for you.

Charity Care: Charity Care is free care.

Financial Assistance: Financial assistance is a partial discount on services. The best discounts are less than the Medicare rate or the rate that Medicare reimburses hospitals for services.

Medicare/Medicaid Reimbursement Rate: This is the rate that Medicare or Medicaid reimburses hospitals for the care they provide to their patients. Medicare and Medicaid cap rates for procedures, related to how much it costs a hospital to provide services and is generally a good price for a health service.

Sticker Prices: Sticker prices are the gross charges of a hospital before discounts, sometimes called Chargemaster rates.

Uninsured: Some hospitals only offer financial assistance to the uninsured. However, almost all have a Catastrophic Care discount for uninsured or insured patients. Basically, the amount paid cannot go over a certain percentage of income, usually 10%, but sometimes 3-5%.