Discounted Cash Prices in Healthcare

By HealthPriceCompare - June 26, 2023

The term discounted cash price refers to the reduced price that providers offer patients who pay for their medical services or treatments upfront, in cash, and without involving any insurance or third-party payer. It is an alternative payment arrangement where patients bypass the payerspecific negotiated rate, also known as the insurance contracted price, and pay the healthcare provider directly instead of relying on insurance.

Discounted cash prices are usually lower than the regular price charged to patients who utilize insurance coverage. This is because healthcare providers often negotiate higher reimbursement rates with insurance companies, that ultimately take into account factors such as administrative costs, billing complexities and delayed payments associated with insurance claims.

Patients and providers alike have become more receptive to utilizing this alternative payment method. For patients, especially those in a high-deductible health plan (HDHP), it is typically less than the amount negotiated by their insurance plan. For providers, they get paid immediately in cash and don't have to rely on the insurance plan or HDHP enrollee to reimburse their practice.

How Much Lower?

Consider an MRI of the head, one of the most common imaging studies used to diagnose a range of conditions such as tumors, blood clots, concussions or blood clots to name a few. Insurance plan enrollees seeking this procedure at one Dallas area hospital would be subjected to an insurance contracted price of $2,725 while the exact same procedure could be obtained from a competing area hospital for a discounted cash price of $528.

In some cases, the discounted cash price can be significantly lower than the regular price charged to insurance companies. Discounts of 20% to 50% off the regular price are not uncommon, but it can also be higher or lower depending on various factors.

The extent of the discount on the cash price can vary significantly depending on the healthcare provider, the specific service or treatment, and the local market dynamics. There is no fixed or standardized percentage reduction that applies universally to all healthcare services.

Why Do Providers Offer Discounted Cash Prices?

By offering a discounted cash price, healthcare providers aim to provide more affordable options for patients who may not have insurance or prefer to pay out-of-pocket. In addition to HDHP enrollees, it can be particularly beneficial for individuals in short-term limited duration insurance plans or for those seeking services not covered by their insurance plans.

Discounted cash prices may vary among healthcare providers and different services or treatments. In addition to using HealthPriceCompare, patients interested in discounted cash prices can also inquire with their healthcare provider or hospital to understand the specific terms and availability of such options.

Providers may take into account factors such as the cost of providing the service, their financial policies, and the patient's ability to pay. This makes it advisable to contact the specific healthcare provider or hospital to inquire about their discounted cash price policy for a particular service or treatment if you fall into this category.

While the term discounted cash price is relatively new to healthcare, it is one that that healthcare consumers should know if they want to make financially savvy provider decisions. The continued proliferation of high-deductible health plans and short-term limited duration insurance demand that patients empower themselves with the knowledge needed to take advantage of this lesser-known alternative approach to paying for healthcare.