I'm getting gouged on prices for medical services when using my HSA plan. How to be billed fairly?

Question

I had never given a second thought to the details of the bills that my health insurance (HI) company used to send me until I moved to a HSA plan.

My typical (before the HSA plan) bill claim would be like, e.g.:

• provider charged us: $550
• HI company says provider is not allowed to charge more than: $200 (so the HI company basically asked the provider to take a hike for the rest of the $350)
• my co-pay: $50
• HI company pays: $150

Now that I have the HSA, the issue has become that the provider is charging me $550, as they always used to.

I asked for a cash discount and explicitly told them I am paying out of pocket.

When I brought over the previous invoices, they told me "we were writing the $350 off as cost of doing business with your HI company. In your current situation, we will report whatever you don't pay to collections and you work that out."

The biggest challenge though has been trying to find out which provider charges what, so I can select a provider based off cost and reputation. But, anytime I ask for a price list, I get a standard "ask your HI company" go around.

It feels too wishy washy so far with the providers basically telling me "we would like to charge you $1000 for a basic office visit, even if you had the sniffles, but we will take whatever we can get in reality so we won't put a cap to what we might ask you for any service we provide. Whatever it comes down to at the end of you debating prices and lengthy negotiations and hours of your time wasted is what you will need to pay with you running a risk of us reporting you to collections if you paid anything less than what we asked for."

Similar story: http://twed.com/some-guy-posted-his-hospital-bill-online-youll-see-why-everyones-talking-about-it/

For those of you who are using HSAs successfully, how has your experience been and is this experience of mine typical? How can I deal with this price problem?

Help! I never thought an HSA plan would be like pulling teeth in practice!

Answer 1

The big difference for me under the High deductible plan has been that instead of paying the co-pay, now I am now responsible for the negotiated rate until I reach the deductible limit. The HSA is only a way to funnel medical payments through a tax free account the insurance company and the doctor don't care about the HSA.

If we go out-of-network, then I am responsible for the full rate, but they only count the negotiated rate as a credit against the out of pocket/deductible. This big difference makes it very important to pick a doctor in-network.

For your example: I would have paid $50 under the PPO, but $200 under the high deducible plan. If I go out-of-network I would have to pay whatever the doctor want me to pay, but the insurance company would only credit me $200 against my deductible. I can pull the extra $350 from the HSA.

It is hard to get good pricing information from some doctors, but the price difference for me has been so large that in-network is the only way to go.

For prescriptions the high deductible plan has been worse, because we pay the full price with no discounts for the medicine, until we reach the plan deductible. That makes the cost of the prescriptions as much as 10x's more expensive. In fact the annual cost of our prescriptions all but guarantees that we hit the deductible each year.

Answer 2

I had an HSA for two or three years. I found very routinely that my insurance company had negotiated rates with in-network providers. So as I never hit the deductible, I always had to pay 100% of the negotiated rate, but it was still much less than the providers general rate. Sometimes dramatically so. Like I had some blood and urine tests done and the general rate was $450 but the negotiated rate was only $40. I had laser eye surgery and the general rate was something like $1500 but the negotiated rate was more like $500. Et cetera. Other times it was the same or trivially different, like routine office visits it made no difference.

I found that I could call the insurance company and ask for the negotiated rate and they would tell me. When I asked the doctor or the hospital, they either couldn't tell me or they wouldn't. It's possible that the doctor's office doesn't really know what rates they've agreed to, they might have just signed some contract with the insurance company that says, yes, we'll accept whatever you give us. But either way, I had to go to the insurance company to find out. You'd think they'd just publish the list on a web site or something. After all, it's to the insurance company's advantage if you go to the cheapest provider. With a "regular" non-HSA plan, they're share of the total is less. Even with an HSA plan if you go to a cheaper provider you are less likely to hit the deductible.

Yes, medical care in the U.S. is rather bizarre in that providers routinely expect you to commit to paying for their services before they will tell you the price. Can you imagine any other industry working this way? Can you imagine buying a car and the dealer saying, "I have no idea what this car costs. If you like it, great, take it and drive it home, and in a few weeks we'll send you a bill. And of course whatever amount we put on that bill you are legally obligated to pay, but we refuse to tell you what that amount will be." The American Medical Association used to have a policy that they considered it "unethical" for doctors to tell patients the price of treatment in advance. I don't know if they still do.

Answer 3

First, as noted in the comments, you need to pay attention to your network providers. If you are unable to pay exorbitant prices out of pocket, then find an in-network medical provider. if you are unhappy with the in-network provider list (e.g. too distant or not specialists), then discuss switching to another plan or insurer with your employer or broker.

Second, many providers will have out of pocket or uninsured price lists, often seen in outdated formats or disused binders. Since you have asked for price lists and not been provided one, I would pursue it with the practice manager (or equivalent, or else a doctor) and ask if they have one. It's possible that the clinic has an out of pocket price list but the front line staff is unaware of it and was never trained on it.

Third, if you efforts to secure a price list fail, and you are especially committed to this specific provider, then I would consider engaging in a friendly by direct negotiation with the practice manager or other responsible person. Person they will be amenable to creating a list of prices (if you are particularly proactive and aggressive, you could offer to find out of pocket price lists from other clinics nearby). You could also flat out ask them to charge you a certain fee for office visits (if you do this, try to get some sort of offer or agreed price list in writing). Most medical practices are uncomfortable asking patients for money, so that may mean flat refusal to negotiate but it may also mean surprising willingness to work with you. This route is highly unpredictable before you go down it, and it's dependent on all sorts of things like the ownership structure, business model, and the personalities of the key people there.

The easiest answer is to switch clinics. This one sounds very unfriendly to HSA patients.