Hospitals Increasingly Demand Payment Before Treatment
As deductibles climb, hospitals are asking patients to pay upfront—sometimes thousands of dollars—before providing care.
Thomas Zordani flew from Denver to Phoenix for a consultation with a Mayo Clinic neurosurgeon about debilitating headaches. He said he was told the clinic was in his insurer's network, but on arrival was told he owed a $5,000 preservice deposit because Mayo determined it did not accept his insurance. He refused to pay, and his appointment was canceled.
Zordani later learned Mayo had sent an estimate of $565 through his insurer's patient portal shortly before the visit—far less than the $5,000 demanded in person.
"We regret that this individual's experience did not meet the high standard of communication we strive to provide," said Andrea Kalmanovitz, Mayo's communications director, in a statement, adding that unexpected deposit requests can arise when patients lack clarity about network status.
Zordani's experience reflects a broader trend: hospitals increasingly asking for payment before, rather than after, treatment. Richard Gundling of the Healthcare Financial Management Association said patients are "basically being asked to self-insure" as deductibles rise. The average family deductible from employer coverage is $3,762 per person, according to KFF, while the average ACA plan deductible jumped 37% this year to $3,786.
According to Matt Szaflarski of Kodiak Solutions, hospitals on average now collect about a quarter of what they expect patients will owe, up from a smaller share in recent years. Collection practices vary by state, he said, with Indiana among the lowest and California and Texas among the highest.
Johns Hopkins Medicine's website states it is policy to collect all amounts owed before non-emergency services are rendered. MD Anderson Cancer Center in Houston says self-pay patients are asked for an initial deposit based on the type of cancer.
Even as upfront collections rise, hospitals' uncollected debt is also increasing, according to Kodiak data from more than 2,300 hospitals, reflecting what a June Kodiak report called a "fundamental shift" toward higher deductibles and more complex cost-sharing.
Chip Kahn, a former hospital industry executive now at KFF and the American Enterprise Institute, said preservice deposits are likely to become more common, making things "harder on the provider, the clinician, and harder on the patients."
This article was produced with the assistance of artificial intelligence (AI), in accordance with our editorial policy.
