This post may contain affiliate links. If you purchase products or services linked from this page, Summit of Coin may receive a small commission at no extra cost to you.

I don’t know if any of you have ran into this situation, but medical companies are asking for you to prepay for upcoming surgeries. According to my research, this trend has been happening more and more, because of the increase in deductibles with insurance plans.

Prior to this new trend, someone would have a surgery scheduled. They would go in for the surgery. The hospital would then file a claim with the insurance company. Once the insurance company processed the claim, then you would get a bill. This still happens today, but the hospital and medical providers are trying to jump the gun by having you prepay.

Why?

Too many times in recent years, medical providers have been burned by the higher deductibles. The insurance company files the claim and with the higher deductibles, not everyone can pay. Thus, the medical companies have been losing money on these higher deductible plans.

Therefore, the transition began. We have been hit by this multiple time over the course of the years, but we never really questioned the process. Everything worked out in the end, but our latest dealing with prepaying made me do some research.

Our Experience with Prepaying:

2016

Prepaid my wife’s OBGYN $1,625 in anticipation for our daughter’s birth
- Did not receive a refund (Good calculation by the OBGYN)

2018

Prepaid my wife’s OBGYN $1,673 in anticipation for our 2nd daughter’s birth
- Refunded $590
Hospital tried to get us to prepay 30 minutes before my wife’s scheduled c-section.
- My wife was in the hospital bed prepping for surgery and some lady from the billing department comes into our hospital room saying we need to talk about payment for surgery.
- Realize, I was not expecting this, because the hospital did not ask us to prepay with our first daughter’s surgery.
- Thirty minutes before your baby is born and your wife goes into surgery – Is money something you want to be talking about at that time? – NO!
- Plus, I had in my head that we had already prepaid my wife’s doctor, therefore I wanted to wait on prepaying the hospital.
- She left this paper with an estimate and told me to come downstairs to settle the payment. I completely ignored it, and let them bill me later as I was enjoying the birth of our new baby!

2019

Prepaid $1,956 for my daughter’s ear surgery (put tubes in her ear due to too many ear infections)
- Refunded $635.35
- Due to error in their calculation had to repay $528.91
Prepaid $1,834 to my wife’s doctor for her nasal surgery
- Refunded $141.20
- Prepaid $3,750 for my wife’s nasal surgery to the hospital
- Due a refund of $2,314.26

The year 2019 was a big year for our family with medical expenses. With the large medical expenses came prepayments, but the prepayments really frustrated me this year, unlike 2016 and 2018. First, with my daughter’s prepayment, they refunded us over $600. Only to realize they made a mistake and they needed us to repay a little over $500. How does this happen?

The bill came in the mail this summer and I was flabbergasted. Thus, I went back to Quicken (our budgeting and tracking software) and checked 2 things, (1) how much we prepaid and (2) how much they refunded us. Next, I logged into Cigna to check the claim for the surgery. Next, I did the math. They were right, we owed them $528.91. Not sure how they made that refund mistake.

The second surgery also frustrated me with prepayments, because we had to dig into our emergency fund to cover the $4,148.26 that we were charged as a prepayment. Sadly, we didn’t push back on the some of the prepayments as my wife’s out of pocket is $3,750. Therefore, we shouldn’t have prepaid more than $3,750.

Therefore, I knew a refund was coming, because two different entities that would be sending two different bills charged us more than my wife’s out-of-pocket. The truly frustrating thing with the situation was that my wife had already used up around $600 of her max out-of-pocket. Therefore, the billing agent didn’t even do her full job at the hospital. She just saw the max out-of-pocket of $3,750 and said that’s what we owe.

We both admit that we made a mistake here, because we know that my wife’s out-of-pocket was $3,750 and we had already used some of it. Therefore, we should have pushed back, but my wife didn’t think about it at the time as she was being pressured to prepay.

Here’s the kicker to the whole story:

The hospital will not refund us the $2,314.26, because of a denied claim by the insurance company. That’s because some idiot at the hospital submitted 2, that’s right TWO, claims for my wife’s surgery. Both claims were for $75,000 each. Think about that for a moment. The hospital that my wife had a 3-hour outpatient surgery charged the insurance company $150,000 for ONE surgery.

Of course, the insurance company is going to deny one claim. It doesn’t make sense for them or anyone to pay twice for the same surgery. But the hospital needs to research the denial of the claim, before they will refund us this money.

Here’s the timeline of events:

Surgery: May 28
Claim Submitted: June 6
Claim completed: July 15, with us only owing $1,435.74.
Repayment Expected within 30 days: $3,750 - $1,435.74 = $2,314.26
No refund was received in 30 days, so we called.
First Call: August 15 (left message and no call back)
Second Call: August 29 (answered, but said that they won’t send refund until they review the denied claim)
October 5, 2019 - We still have not received a refund.

This whole situation is frustrating, because that money is not working for me. Instead, it is sitting in a hospital’s account as they try to decide if they are going to pay us back. I’m losing the interest that I could be making on the money.

Luckily, my wife and I are in a solid place financially and have a foundation of money that we can rely on while our $2,000 sits in the hospital’s account, but it is annoying to be stuck in this position.

What would have you done in our situation? What have you done in the past with medical and prepayments?

According to my discussions with my wife’s insurance company and my research online, insurance companies suggest that you do not prepay and should wait until the insurance company finishes the claim. Specifically, my wife’s insurance company suggests never prepaying.

So, there’s the answer, don’t prepay! However, medical companies are bigger entities and are pushy. How do you avoid prepaying, when they push for it and it almost seems like they expect prepayment or they won’t complete the surgery.

With both my daughters tube surgery and my wife’s nasal surgery, it seemed like the surgery would not be completed unless we prepaid. Can they deny service, if we don’t prepay? I don’t think so, but it sure seemed like that in each situation.

My wife and I said that this situation really changed our opinion of the whole prepayment situation. Therefore, we will push back and tell our medical providers that we will pay once the insurance company completes the claim, instead of prepaying.