Planning and Paying for a Diagnostic Procedure

Millions of diagnostic exams are performed in the United States each year — but they’re not simple or cheap. In fact, planning and paying for these often-essential procedures can be confusing and expensive.

Most of the time, a doctor will recommend a diagnostic test — such as a MRI, X-ray or echocardiogram — so he or she can better understand your symptoms. If the test reveals something, your doctor may be able to make a diagnosis and prescribe the right treatment. If normal results come back, which is often the case, you and your doctor may have to keep working to understand what’s ailing you. Either way, diagnostic exams are a crucial part of modern medicine.

If diagnostic exams were like most consumer products, you could simply compare CT scan prices online, come up with the funds, and make your purchase. Unfortunately, almost nothing in health care is that simple. It might be difficult to estimate your costs, and they’ll depend on several factors, including:

• Your diagnostic facility 
• Your health insurance plan’s network
• Your health plan’s deductible, coinsurance, and copay requirements

That may look daunting, but don’t worry. If you’re reading this article, you’re in a good position to save money.

“If you’re doing your homework now, and planning ahead of time, there’s a good chance you’ll pay less than someone who doesn’t plan,” says Adria Goldman Gross, owner of MedWise Insurance Advocacy and co-author of “Solved! Curing Your Medical Insurance Problems.”

Here’s how to effectively plan for your diagnostic exam so you can more easily lower your costs.

Check your insurance coverage and network

If you have health insurance, the cost of any procedure will depend on your health plan’s cost sharing structure. Your plan might require you to pay the full price, the amount of your deductible, a flat copay, or coinsurance, which is a percentage of the procedure’s cost.

If your facility and diagnostic specialist both participate in your health insurance network, you’ll pay less overall than if they’re out of network. If your doctor refers you to a non-network facility, ask for an in-network option.

This is especially important if your insurance plan is a health maintenance organization (HMO) or an exclusive provider organization (EPO). HMOs and EPOs don’t cover out-of-network services, except in some emergencies. Your insurance card should indicate if you have an HMO or an EPO; if it doesn’t, call the customer service line.

If you’re uninsured, or will have to pay the full price because you haven’t met your deductible, call the facility’s billing department ahead of time and explain your situation. When you do, ask:

• About the cash-pay price. You might receive a discount of up to 30% if you can pay up front.
• If the facility can offer you a payment plan
• If the facility provides any assistance programs 
• If the facility can put you in touch with charities that help defray medical costs

Shop around for diagnostic facilities

If your health insurance is an HMO or or point of sale (POS) plan, using the facility to which your doctor refers you will be the least expensive option. That means you can skip shopping around.

However, if your insurance is a preferred provider network (PPO) or an EPO, you can (and should!) shop around for a facility within your network. Remember that figuring out the cost of an MRI, or another diagnostic procedure, is more complicated than simply knowing its price. Facility fees, charges for a specialist to read your results, and medications can all increase the cost.

But that’s not all. The prices in-network facilities charge for the same procedures vary — sometimes by hundreds, or even thousands, of dollars. That affects your costs, even if you have coverage. 

Say you need an MRI and your plan requires a 30% coinsurance. An independent imaging facility may charge $400, but the large hospital down the street charges $2,000. You’ll pay either $120 or $600, depending on which you choose.

Now, say your plan requires you to meet a $1,000 deductible before it pays anything toward your diagnostic procedure. If you choose the less expensive facility and haven’t met your deductible yet, you’ll pay the entire $400. If you choose the large hospital, you’ll be on the hook for the deductible and 30% coinsurance for the remaining $1,000 of the charge, or $1,300.

“The best way to know your costs is to get an estimate, a specific and detailed one, based on you and your insurance,” says Gross.

To get your estimates, grab your insurance card and set aside about an hour to do the following:

• Find contact information for covered facilities nearby through the provider directory on your insurer’s website.
• Ask each facility for an estimate based on your insurance coverage.
• Record each facility’s estimated cost, the name of the person giving you the estimate, and the date.
• Keep these notes in case you need to negotiate the bill later.

Obtain a prior authorization

Once you’ve chosen a facility, you may have an extra step: getting a prior authorization for the procedure from your insurer. Insurance companies sometimes require this approval to contain costs; they want to know you really need the procedure before they agree to pay for it.

The doctor recommending your exam will probably handle the prior authorization. However, it’s your responsibility to request it. Your health policy summary should state whether or not you need prior authorization for diagnostics; if it doesn’t, call the customer service line.

Check the bill before you pay

A week or two after your appointment, you’ll start receiving documents from your insurer and procedure provider. The one that says “NOT A BILL” is your health insurer’s explanation of benefits, or EOB. You should also receive a bill for your portion of the charges.

If your bill shows one lump sum due instead of an itemized listing, call the facility and request a detailed version with billing codes and individual charges.

“You are within your rights to request an itemized bill,” says Gross, “and it is the only way to know if you are being charged fairly.”

Your EOB will list the procedure codes billed to your insurer, and whether they were paid. Look the codes up and make sure they match what’s on your bill. After you decode the EOB, there should be no surprises.

If you are surprised by a larger-than-expected bill, a billing error may be to blame. Calling the facility short be enough to correct small problems, such as an incorrect birthdate or a misspelled name. 

But if you owe much more than you were expecting, you may want to negotiate your medical bill with the provider. Gross suggests showing them your estimate and asking them to honor it. “I’d say about 70% of the time, they will lower it to that price,” she says.

If they don’t, consider hiring an advocate like Gross to negotiate on your behalf, or learn more from NerdWallet on how to do it yourself.

Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email: lacie@nerdwallet.com. Twitter: @LacieWrites.