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Paying for Surgery Without Insurance: How to Negotiate Medical Payment

If you are uninsured and require surgery due to an injury, not only are you worried about the surgery, but you are probably worried about the medical costs, too. This is an additional headache and, sometimes, a financial disaster.

Often, doctors and facilities have credit card applications readily available for you. They will inform you of a special, no-interest period; however, if you fail to pay the balance off in six months or a year, the original balance is subject to an interest rate, usually around 20%.

Even if you are under the impression that you will be able to pay off the medical bills, before you apply for a loan to receive your necessary surgery, you should negotiate a fair rate of payment with your medical providers. I’m going to explain why and how.


Why to Negotiate Medical Payment:

Insurance Companies Negotiate:

Insurance companies rarely, if ever, pay for 100% of the medical charges for surgeries; a payment is negotiated for every provider based upon a percentage of billed charges or a pre-negotiated, flat-rate payment.

Excessive Charges:


Sometimes, cash-pay patients are given an estimate of charges that is a “bottom-line” total, without a description of services from the facility. This is completely unacceptable. Think of it in terms of grocery shopping—the receipt doesn’t give you a bottom line total. An insurance company would never pay a claim if they received this type of bill, and neither should the cash pay patient. You need to know what the services are for and what each service cost (how much was your dairy, produce, meat).

It is not uncommon for a facility to mark up the costs of the supplies and items they use by 4000-6000 percent. This would include items like: gauze; IV tubing; fancy paper gowns; medications from Tylenol to anesthesia.

These fees are excessive and above a usual, customary and reasonable rate. When the charges have been marked up this much, this is considered price gouging and there have been many class-action lawsuits against hospitals and facilities for this practice. (At the end of this hub, there are links to articles that discuss this practice). As you can see, if you negotiate a payment with your provider based upon the percentage of billed charges, because of the excessive mark ups, you are still paying too much.


Like the facility, it is not unusual to be presented with a bottom line figure from a surgeon's office. You need to know what type of surgery you are having, including the CPT or procedure code, and the charge for the procedure. You also need to know if the payment includes post-operative care or if you will be required to pay for this separately. Additionally, you need to find out if there will be multiple procedures performed and if you are being charged at full price for those additional procedures (explained further, below).

How to Determine Fair Medical Reimbursement:

Healthcare Blue Book:

There is a website called Healthcare Blue Book. You are able to look up surgical procedures by its description. I want to stress that this should be used as an indicator only, because it is designed for a layperson who knows absolutely nothing about reimbursement rates, but this will get you started in determining a fair reimbursement rate. (An extremely accurate way to determine fair reimbursement is by utilizing the AMA website, explained below.)

For example, let’s say you are need a rotator cuff repair--a common shoulder injury that requires surgery--(CPT 29827). In my area, according to Healthcare Blue Book, it indicates a reasonable payment is $1734.00 for the surgeon, $3780.00 for a facility (based on a 2 day stay, this surgery is typically performed on an outpatient basis), and $723.00 for the anesthesiologist.

Healthcare Blue Book indicates these rates reflect what is generally accepted from providers as payment from an insurance company; however, in my opinion from reviewing many of the figures and surgeries, it represents more of an appropriate charge for the surgeon, an appropriate payment for the anesthesiologist, and only an indicator of charges for a facility, because many of the surgeries listed do not include outpatient rates for a facility.

If your doctor is charging you more than what Healthcare Blue Book indicates, and you want to attempt to negotiate a better rate, I suggest utilizing the AMA (American Medical Association) website to determine a fair rate of payment. You will need to ask your surgeon’s office for the 5-digit CPT code for the procedure. You will also be able to determine an appropriate reimbursement rate for the facility. Also, a calculator would be handy.

American Medical Association:

You will need to accept the agreement. The next page comes up; enter the state and city of your surgery, and enter the CPT code.

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Using the above example for a rotator cuff repair in my area, AMA indicates the Medicare reimbursement for this procedure is $1144.66 for the facility.

Many insurance companies will issue payment to facilities based on the Medicare amount by adding an additional percentage, anywhere from 30%-80% or, Medicare rates at 130%-180%. By multiplying $1144.66 by the percentage, you will see that a fair rate of payment for a rotator cuff surgery for the facility is $1488.00-$2060.00.

For the surgeon, payment is determined by multiplying the facility reimbursement of $1144.66 by the Medicare conversion factor of 36.079 (a percent). In my example, this totals a Medicare payment of $412.98 to the surgeon. You will need to multiply that number by 130%-180% to determine a fair payment rate from $536.87-$743.36. (The conversion factor changes yearly, and can be easily found by googling: Medicare conversion factor.)

Multiple Procedures:

In some cases, multiple procedures are performed during surgery, in which case you should never pay full price for the additional procedures. Insurance companies don’t and neither should you. Here’s why:

Surgical procedure reimbursement takes into consideration time, complexity, instruments and supplies needed to perform a surgery. Subsequent procedures or, additional/multiple procedures that are performed have a reduced reimbursement rate because factors taken into consideration for payment have already been performed: the patient prep, the cut, the surgical equipment, the time to analyze the area of repair, etc. Simply explained, if each procedure was performed on a different day, there would be no payment reduction. Because the procedures were performed all at once, the actual cost of the additional procedures decreases--substantially.

It is important to realize that each charge for a surgical procedure on the bills from the facility and the surgeon will almost always reflect a “stand-alone” charge; meaning the charge for each procedure is as if it was the only procedure performed. Since each procedure is billed as if it was a stand-alone procedure, insurance companies utilize software that automatically reduces payments for multiple procedures. The reason each procedure is billed as a stand-alone charge, is because it is easier to do; otherwise, every time a bill is entered, the charges would need to be manually entered. Cash-pay patients don’t have an automatic payment reducer, so the majority of the time, they are paying each procedure as if it was the only one performed.

Insurance companies reduce multiple procedures by a rate of 50% and 25% for the second and third procedure, respectively. For example, if the rotator cuff repair was the second procedure performed, you would take the final figure for the facility and physician and multiply each by 50%.

Additionally, these payment rates include all post-operative care necessary by your surgeon.


Hopefully, the math didn’t frighten you from determining what a fair medical reimbursement would be for your surgery, and now you can begin negotiations.

I can only take you so far in advising you how to do this. I’ve given you the necessary tools to figure it out, and I will explain who you need to talk to, but the results will all depend upon your determination to lower the cost of your medical bills. Also, never forget that your results reflect a fair reimbursement that insurance companies reimburse providers.

Surgeon: Speak with the office manager first. Always begin by explaining it will be a financial hardship. Hopefully, the office manager will offer a result similar to your figures. If not, tell the office manager that you reviewed common reimbursement rates for your procedure, and give the office manager your results. If you are having multiple procedures performed, make sure you question the rate reduction issue.

If this fails to produce a fair payment, you should then discuss everything with the surgeon. The surgeon is more likely to accept the rates, if his number one priority is patient care.

If this fails, you may want to shop around for another physician.

Facility: Speak with the billing director--not a supervisor, not a biller, not the person that hands you the credit card application. Reiterate the same conversation you had with the surgeon’s office, beginning with the financial hardship, and supply them with the reasonable rates.

If you are unable to obtain a reasonable rate, it is much more difficult to shop around for a facility. However, most facilities want to receive payment (which is why they might have supplied you with a credit card application). If the credit card application is pushed by the billing director, you need to make clear that it doesn’t matter who you are paying, the result is still the same—a financial hardship.

Finally, every negotiated rate should be obtained in writing from each provider.

As I explained, your results will depend on your determination. It will also depend on how much your medical bills are—the higher your bill, the more determined you will be, I’m sure. You need to be assertive and remember that cash-pay patients are often penalized just because they don’t have insurance. If providers accept the same payment that you are offering from an insurance company, there is no reason they shouldn’t accept the same payment from you.

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Jenifer L (author) from california on August 30, 2010:

$100.00 for medical records...I hope you threw a fit. Though I don't know the circumstances behind the medical records request (if insurance company requested the records--insurance should pay for cost)or how many pieces of paper it required, it is a wonderful example of how providers gouge patients, at your expense, of course. Usually, the louder you scream, the more likely you are to get these sorts of charges reduced to a more reasonable rate.

Thanks for visiting and leaving a comment.

fetty from South Jersey on August 29, 2010:

Excellent hub. We are self-employed but our deductibles can be staggering. Also, a hospital asked me to pay for my medical records two years back ($100). I was shocked. Will attempt to get these this year for no charge. Great ideas here .

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