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For consumers with high deductible health plans—which have become the rule these days rather than the exception—cash-pay options have become more attractive. In some cases, cash pay is actually a better price than the insurer’s negotiated rate, so it makes sense for a consumer who is paying out-of-pocket regardless to skip their insurance altogether. The only downside would be the fact that the direct, out-of-pocket expenditure would not be applied to the threshold of the insurance policy’s annual deductible. Two states are now addressing the payment disconnect for these situations. New laws in Tennessee and Texas allow patients to choose to pay cash prices for health services and still apply those expenditures to their health plan deductibles by submitting receipts to the insurer. “When a patient has a high deductible, such as $5,000 or greater, it’s unlikely they will meet that deductible through routine medical services,” says Alan Ayers, MBA, MAcc, president of Experity Networks and Practice Management Editor of JUCM. “In the interim, patients may end up paying more if the insurer’s negotiated rate is higher than the cash price, and providers incur the expense of filing claims as well as the delay of typically 180 days to receive payment from the patient. That’s all in addition to bad debt write offs.” 

Here’s the spread: An analysis from the Cicero Institute found in a small representative sample of cash prices vs insurer negotiated prices that cash can be more affordable than the member’s out-of-pocket responsibility through insurance. For example, colonoscopy cash prices in 14 sites across Nashville, Tennessee, varied from $541 to $4,629, whereas insurer rates ranged from $2,126 to $2,592. 

Consumer Cash Pay Applied to Deductibles in 2 States