Pay medical bills out of pocket and get reimbursed by insurance?

[teller80]

I had surgery this summer and while looking at the bills I wondered...

What if I paid for all of my bills on my rewards credit card ($40,000 ish) and had my insurance reimburse me instead of the hospital/doctor? Could I have done that?

 

[gottalovepluto]

Even if allowed I would never try it! Insurance companies do anything & everything not to pay up. Don't give them an excuse for a protracted fight. On a practical level (IF this is even allowed- I suspect not because insurance companies pay hospitals a lot less than we are charged) unless you can afford to front $40K for months on end waiting/hoping insurance pays you back do not do this. You could destroy your financial future if you can't take a 40K hit. [ETA: could have I realize this particular decision is already done.]

(I get the dream though! Would be nice to get that cash back- might help pay for the 41% increase my awful bronze high deductible Obamacare plan just told me is coming next year. Although my parents got a 51% increase on the same thing so who am I to complain?) Well I went totally off topic there- returning to OP's regularly scheduled discussion:

 

[kymom99]

My thoughts as well. If a service is denied I doubt the hospital would bother trying to help you appeal

 

[tvguy]

I suspect the hospital wouldn't accept a credit card for that dollar amount. Just like you can't use a credit card to buy a new car, even if it is within your credit limit.

 

[Tinknalli]

I work in medical billing. Problems with this would be that insurance companies rarely pay the full amount of the bill. They pay a contracted amount. Another issue is that insurance will usually only pay from a medical claim billing form such as a CMS1500 or UB04. Most hospitals would not provide these forms to you and would only provide them directly to an insurance company. When the insurance company pays from this claim form they will pay the hospital not you. You also sign forms at registration allowing the hospital to bill your insurance. There is also language in these forms that you are responsible for amounts not paid by your insurance. Now say you try to tell the hospital you have no insurance so they will allow you to charge to your card. Once they do this you now want the money from your insurance, so you need the above mentioned forms. You have to now tell the hospital you have insurance so they can send said forms top your insurance. They send the forms and insurance pays them, creating a credit on your account which would in turn be refunded back to your card, voiding your rewards and gaining you nothing. Plus, as pointed out if you have paid up front then your insurance denies, the hospital has there money so they are unlikely to fight your insurance to get payment.

 

[supersnoop]

I had surgery this summer and while looking at the bills I wondered...

What if I paid for all of my bills on my rewards credit card ($40,000 ish) and had my insurance reimburse me instead of the hospital/doctor? Could I have done that?

Sure you could, but...

As mentioned above, the insurance company only pays the contracted amount. So, they’d send you a check for $2,000 and tell you to get a $38,000 refund from the hospital. How much time and effort will that take, and how many points will you actually end up with?

More practically, if you have a HDHP and an HSA, just use your credit card to pay the deductible and reimburse yourself from the HSA.

 

[bluehen]

I suspect the hospital wouldn't accept a credit card for that dollar amount. Just like you can't use a credit card to buy a new car, even if it is within your credit limit.

I Used a credit card to buy our car in January. The 1% was a nice over 200 dollar bonus.

 

[tvguy]

I Used a credit card to buy our car in January. The 1% was a nice over 200 dollar bonus.

You were lucky, very very few car dealers will accept a credit card for anything more than a down payment.

 

[ImprovGal]

More practically, if you have a HDHP and an HSA, just use your credit card to pay the deductible and reimburse yourself from the HSA.

This.

Even if you don't have an HDHP with HSA and instead have an FSA, you can use your credit card to pay the member liability portion and then reimburse yourself for the qualified medical expenses from the account.

In my area, most large volume medical providers (certainly the hospitals) take credit cards as payments. The % fee they get charged to process the cards is offset by the guarantee of payment. Many HSA and FSA accounts provide a debit visa or mastercard to simplify those payments so it makes sense for the providers to accept them.

To the OP - Your insurance benefits are most likely different for in-network vs. out-of-network providers. If it's an in-network provider, let them bill the insurance directly (they may calculate your member out-of-pocket in advance, however, as a deposit for the procedure) to help ensure it adjudicates correctly as an in-network claim. If, however, the provider is out-of-network, then by all means pay ahead and you may submit the bills to your insurance carrier to be processed based on any out-of-network coverage you may have.

 

[teller80]

More practically, if you have a HDHP and an HSA, just use your credit card to pay the deductible and reimburse yourself from the HSA.

I used my credit card for the amount in my HSA and then got reimbursed, so I did earn a few points. But when I was doing it, I was like "wait, what if I could do this for all of these bills?!?". But I see lots of flaws in that plan now, I appreciate everyone's help. Thanks!

 

[gottalovepluto]

I Used a credit card to buy our car in January. The 1% was a nice over 200 dollar bonus.

You were incredibly lucky*. Most places that allow that only allow up to $X,XXX to be charged because the dealer is eating a 1-3% fee.

*dealer probably already marked up all their prices to account for the CC fee in the purchase price.

 

[bluehen]

You were incredibly lucky*. Most places that allow that only allow up to $X,XXX to be charged because the dealer is eating a 1-3% fee.

*dealer probably already marked up all their prices to account for the CC fee in the purchase price.

The two other dealers in the area would not match the price as it was 2000 under the average selling price for the vehicle. I am sure they made money, but I did do my due diligence. I asked them if it cost them money. The reply was that it was a flat fee and not that bad. I would suggest you ask. Nothing lost there.

 

[gottalovepluto]

The two other dealers in the area would not match the price as it was 2000 under the average selling price for the vehicle. I am sure they made money, but I did do my due diligence. I asked them if it cost them money. The reply was that it was a flat fee and not that bad. I would suggest you ask. Nothing lost there.

Oh absolutely! Because some dealers will. Someday I will find one too!

 

[DisneyCowgirl]

I've had a ton of experience now with paying dr/hospital bills and dealing with insurance and I would definitely NOT do this even if I could for several reasons. The insurance sometimes takes months to pay, and that's with people who submit claims for a living preparing and submitting the claims. Almost 100% of the time, the estimate given beforehand of how much the dr/hospital was going to collect from me and from the insurance was overstated, meaning that if I was going to pay and get reimbursed from the insurance, I would then have to go back through the dr and get refunded the overpayment. Getting a refund issued from some of these big medical groups is challenging--I overpaid early this year and I have been on the phone at least weekly since June trying to get refunded.