In the United States, can a medical practitioner legally charge health insurances a different amount from what it would charge a non-insured patient?

I am mostly interested for in the states of California, Florida, and Massachusetts.


They're not actually billing people different amounts because they have insurance or not. Doctors can pretty much bill a patient whatever they want for their service, similar to how a grocery store can charge whatever they want for their fresh deli cheese. Generally, they charge every single person the same amount. It just gets discounted depending on the insurance you have and how much they're willing to pay.

One of the huge benefits of having medical insurance (outside of them paying for your medical expenses) is that they build contracts with service providers, known as their network. Those contracts specify prices (both preset and algorithmic) for certain services that you receive through those providers - the insurance provider will only pay that much and the doctor cannot charge the patient more than what is paid.

If a claim was processed through a different insurance provider, the price will likely be different since each provider will have a separately negotiated contract with different price points for different services. It's not a system of "this is the insured price and this is the uninsured price" but rather a system of "this is the contract you established saying you'd accept this much from us for this service."

For an uninsured person, though, you have no insurance provider and more importantly no provider contract backing you up. So you'd have to face the full force of the non-discounted price of those services. You'll face the same problem even with insurance if you go out-of-network, where the provider does not have contracts and therefore will only cover up to a certain amount that they would normally pay out for a similar service, requiring you to cover the rest of the amount of whatever the doctor decided to bill for that particular service. Without that insurance contract preventing the doctor from billing you the remainder of what they'd normally charge, you'll likely be slapped with a bill for that remainder.

Directing back at your original question: there is no reason that a medical provider would ever legitimately bill someone a different amount because they are insured or not, thus there are no laws preventing it. It's that they already agreed to accept this certain amount from patients covered under this specific insurance. Again, they bill every patient the same amount - the insurance company is just saying "we're giving you this much and the rest of this, yeah that needs to go away."

If you've ever looked at an EOB (Explanation of Benefits) from your insurance company, you'll see that the actual billed amount from the doctor is almost always much, much higher than what is actually paid out by you or the insurance, often known as the insurance discount. Maybe you'd rather think of it as a coupon?

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  • I live in a country with a "sane" healthcare system. I have read lots of stories of vastly cheaper prices (in USA) when directly negotiating with a doctor and not using insurance. – davidgo Dec 21 '16 at 18:54
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    @davidgo, the US healthcare prices are "sane." Once you take into account the unique aspects of the US healthcare system, legal system, and the government bureaucracies that provide healthcare funding for many Americans, the health care system costs in the US are exactly what the net sum of market forces would predict. – StatsStudent Jan 16 '19 at 15:27
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    I've been in the individual market for 15 years. When using a health-care provider I always ask the cash price for the service and quite often get a price that is lower than the negotiated price contracted by my insurance carrier. The cash price of the last MRI I had was lower than what my insurance company pays. I choose to pay cash in these instances because it's cheaper than my out-of-pocket costs with insurance. I live in the U.S. in an area with many part-time Canadian citizens; it's not unusual to see "cash price" documents at medical offices or see signs advertising a discount for cash. – Dave D Jan 16 '19 at 15:53
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    @davidgo, what market force do you take issue with specifically? It's hard to talk about generalities. There are unique inputs and outputs of the US healthcare system. Some are very desirable and some are not so. – StatsStudent Jan 16 '19 at 19:07
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    @StatsStudent Im not an american, so I can only guess, but I expect - That pharmaceutical companies can buy laws, That malpractice suits can run rampant, that a basic social need is essentially privatised so that it needlessly financially cripples most users. Those "unique inputs" that make US healthcare something only the rich can afford - On average, Americans pay by far the most for care, with outcomes demonstrably worse then countries which pay half as much (eg Canada, half average cost, 3 year longer average life expectancy, more medical professionals as a precentage of people) – davidgo Jan 16 '19 at 19:30

The answer previously given is completely wrong. Health care providers absolutely have 2 different sets of pricing, for insured and non-insured. And, the difference in pricing is substantial. This is why you are asked before services are rendered if you are using insurance, or paying out of pocket. This is standard practice in any industry that utilizes insurance claims, not just medical (auto repair, home repair, etc...). I know this from being in the industry, as well as through personal experience in paying for identical services with and without insurance. Generally, non-insured pricing is currently about 60 percent less than insured pricing. For example, if you go to a provider to receive an MRI scan and use an insurance policy for payment, the cost may be around 2,000. If you go to that same provider and ask for same service, and notify beforehand you are paying out of pocket, your cost will be about 800. This is not a non-insured discount, rather an inflated price for insured service. For one thing, providers know they can retrieve more money from an insurer than an individual. Also, they charge more because they have to utilize more personnel on their staff to process insurance claims and and collecting from insurance companies can be difficult and they never pay the full amounts. This is the primary reason people think that health care cost so much, because most people only see inflated amounts that are billed to insurers.

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  • It is certainly possible that a select few do this, but most don't. As indicated in a comment on my answer, some offer a discount if you pay in cash, but it is extremely rare to find providers that straight-up charge a different price for non-insured individuals. That would violate the contracts they have with the insurance companies. Most simply offer payment plans to help those without insurance cover the full cost. Don't try to apply your experience with only a couple providers to the entire market - it's just not true. – animuson Jan 16 '19 at 18:28
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    "This is why you are asked before services are rendered if you are using insurance, or paying out of pocket" - No, it's really not. They ask you that because they need to check things, like whether it's valid. Particularly, whether your plan has a co-pay that they should charge you up-front before rendering services. And more importantly, whether or not they're likely to get paid for the service. It's similar to running a credit check when applying for a loan. If there are red flags, they may refuse to provide service that day. – animuson Jan 16 '19 at 18:33
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    "...they have to utilize more personnel on their staff to process insurance claims and and collecting from insurance companies can be difficult..." - I can't imagine how submitting claims to the insurance would be more expensive. They literally have to do all the same work to generate a bill, and it's just an extra step of submitting it to the insurance company's system before sending it to the client. Most of this process has been automated away, to the point that they can run your insurance at check-in and figure out exactly how much you'll be responsible for in under a minute. – animuson Jan 16 '19 at 18:44
  • Can you cite sources beyond your own experience to indicate that this is a widespread practice? Can anyone cite law on the matter one way or another? I know that on auto repairs in NJ, having a different price for insured repairs is criminal, classed as a form of insurance fraud. But that may not apply to medical claims. – David Siegel Jan 21 '19 at 23:29

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