Now that the penalty for not carrying health insurance has been repealed, many people are dropping their coverage all together.
They figure they can cover their routine healthcare costs out of pocket with their own cash and pick up health insurance if something really bad happens.
And as more and more folks pay cash for their healthcare, they need to know how to haggle.
How to get the lowest price possible when purchasing their healthcare for cash.
Fortunately, you “know a guy.”
In last week’s post we looked at why the charges on your bill, the “top-line price” are so high–and how little Medicare and Medicaid actually pays.
The whole system is confusing and difficult to understand.
That’s completely intentional.
It’s the same principle as your cell phone bill.
But you’re not helpless. You’re about to be informed.
If your healthcare need isn’t an emergency, then make a doctor’s appointment.
If you have a personal clinician, that’s where you should start. They can take care of most things more cheaply than a specialist.
But if you think you know what kind of specialist you want to go to but don’t have a name, here’s an online directory where you can start your search. Just use the “find a physician” tool.
So, you’ve found your doctor, now let’s find your price.
Here’s the foundation of your strategy:
Any doctor that take Medicare and/or Medicaid is willing to accept payment for their services at a greatly reduced price.
There is no reason that you cannot negotiate to pay a similar price, up front—and skip all the paperwork.
This is what you do.
Call the doctors office.
“I am a prospective new patient. May I speak to the business office manager?”
If no, hang up and try another doctor.
If yes, then wait until the business office manager (BOM) is on the line and ask:
“Do you accept Medicaid or Medicare?”
If no, hang up and try another doctor.
If yes, then ask:
“Do you accept cash payment at the time of service?”
If no, hang up—this happens rarely, because such businesses are not around for very long.
If yes, then it’s time to find out what they will accept.
To find out if they will simply charge you their lowest rate, their Medicaid rate, next ask:
“Excellent, then, of course, you’ll accept as payment in full the Medicaid allowable, paid in cash directly by me to you at the time of service, right?”
If yes, then reply:
“Thank you! Can you please tell me what the estimated amount is for an office visit using the Medicaid fee schedule, so I can know how much money to bring in. Also make a note on my account that we have negotiated an agreement for me to pay at this rate, in cash, at the time of service.”
If they won’t accept the Medicaid allowable, then reply:
“I guess I understand. Well, then surely you will at least accept as payment the Medicare allowable, paid in cash by me to you, directly, at the time of service?
If they respond no, then hang up—such healthcare business are revenue hungry, they’ll put their charges before your health every time. You’re much better off getting your care elsewhere.
If yes, then:
“Thank you! Can you please tell me what the estimated amount is for an office visit using the Medicaid fee schedule so I can know how much money to bring along with me. Also make a note on my account that we have negotiated an agreement for me to pay at this rate, in cash, at the time of service.”
At some time during the call, the office manager might point out that they have a discount for cash services unrelated to the Medicare or Medicaid rate—usually as a percentage of their “top line price”, which you now know is already inflated, divorced from reality and few people actually pay.
This is a trap.
Don’t take it.
Only take discounts if they are related to the Medicare or Medicaid price.
Because that way you’ll know your costs in relation to what our government pays (also known as reality), not in relation to what the doctor says it should be (also known as fantasy).
Instead, you should respond:
“I can’t pay a cash price based on your charges, I don’t know how they’re determined. But I can pay cash based on government charges I do know how they’re determined. I have the cash in hand and need the care. I am willing to pay the price you would be getting from Medicaid/Medicare—the price the government has determined for the services. I would love to tell everyone I know how flexible you and your organization are. Give me a price on based on your Medicaid or Medicare rates and you will have not only earned my loyalty to your practice but also all fives on my patient satisfaction survey—and I’ll be sure to mention your name specifically.”
Give them a chance to be surprised, because chances are, you’re the first one who’s ever spoken to them like this.
But in the end, if the answer is still a “no” or a bunch of hemming/hawing, thank them for their time and hang up.
Treat them exactly how you would a used car salesman.
Because that’s how they’re treating you.
You can do this with any healthcare service you need to purchase ahead of time.
Office visit, surgery, laboratory, x-ray.
Just don’t talk to the doctor or nurse.
And if we’re employed, we have zero influence on billing and payment.
Only speak with the office manager.
And only to tie the amount of your cash payment to the Medicaid or Medicare payment rate.
You’ve already paid for the research the government did for you. You might as well use it.
But, of course, not all healthcare’s planned. Some is purchased in an emergency.
But, although your position’s not as strong, you can still negotiate after the fact.
Next week we’ll discuss how.