Save Big: Negotiate With Your Doctor

June 14, 2010 — -- I'm cramming to write this week's column before I head off to have my annual physical. That inspired me to write about how you can SAVE BIG by negotiating with your doctor. Doctors are the most important part of our healthcare team, and I think they should be paid fairly for their services, but if you want or need to save money at the doctor's office, it is definitely doable.

In a Harris Interactive poll, 61 percent of people who negotiated with a doctor were successful in getting a lower fee. But here's the problem, only 12 percent of people surveyed had ever even tried.

You need to negotiate with your doctor directly. Not the nurse, not the front desk, certainly not the billing department. Most doctors got into the field because they want to help people. Mostly they help them physically, but occasionally financially. It helps to offer to pay in advance. Since doctors spend thousands of dollars chasing after patients who don't pay their bills, somebody who is willing to pay up front is a very attractive prospect. Question is, what price should you suggest? It's easier to broach the subject of a discount if you have an understandable price to throw out there.

Ask for the Medicare Rate

Since doctors are accustomed to discounting their fees for Medicare patients, one tactic is to ask to pay the Medicare rate or the Medicare rate plus 20 percent. This is not very practical for a simple office visit but well worth it if you need a significant procedure.

How do you find out the Medicare rate? Ask the doctor's office for the "CPT Code" or Current Procedural Terminology Code of the procedure you need. CPT codes are the five-digit codes that identify the test or procedure you need; they are different from diagnosis codes. These CPT codes are developed by the American Medical Association to describe every medical service. The AMA maintains a consumer-friendly database of Medicare prices based on CPT codes and you can find it here. You must search the correct code plus the city and state where your doctor is located to get an accurate price, as Medicare prices vary regionally.

Try for the Contracted Rate

If the Medicare rate doesn't resonate with your doctor, then you can ask to pay the "contracted rate" or "allowed amount" that insurance companies pay. The "contracted rate" is the discounted price doctors agree to accept when they join an insurance company's Preferred Provider Organization or PPO. According to the independent medical pricing website HealthcareBlueBook.com, this rate can be two to five times less than the doctor's regular rate.

To learn the insurance company rate for services, you can look up the procedures you need on Healthcare Blue Book by keyword or category. The site lists what it considers "fair" prices for hundreds of procedures. These prices are based on the average amount insurance companies pay for each procedure. HealthcareBluebook says you should be able to get the service you need for its quoted price if you pay in full at the time of treatment. Once again, be sure to input your zip code for an accurate price in your area.

Request a Payment Plan

If none of this works, there is a fallback position. If you can't convince your doctor to give you a discount, then ask for a payment plan. Some doctors will insist on their full fee, but will allow you to pay it gradually over time.