Full Breakdown
Hospitals Increase Upfront Payment Demands Amid Rising Deductibles
8/13/2026, 9:51:58 PM
Core Event: Surge in Pre-service Deposits
In early 2024, Thomas Zordani traveled from Denver to the Mayo Clinic in Phoenix for a neurosurgical consultation. Although his insurer listed Mayo as in-network, the clinic’s financial office designated him “self-pay” and demanded a $5,000 preservice deposit. When Zordani refused, the appointment was cancelled. He later learned that Mayo had sent an estimate of $565 through his insurer’s portal shortly before his visit. Zordani’s complaint resulted in a September 2025 arbitration that awarded him $47,500 in damages after a finding that Mayo violated Arizona’s consumer-fraud law by failing to disclose its out-of-network status before his travel.
Background & Context
Hospitals are expanding point-of-service payment policies as deductibles climb. Insurers have raised average family deductibles to about $3,770 for employer-sponsored and ACA plans, a 37 % increase this year, according to KFF. Higher cost-sharing shifts more financial responsibility to patients, prompting providers to secure funds before care is rendered.
Data & Statistics
- Kodiak Solutions’ analysis of more than 2,300 hospitals shows providers now collect roughly 25 % of the amount they expect patients will owe, up from about 15 % a few years ago.
- When insurers estimate a $1,000 reimbursement, hospitals may request $250 upfront; collection rates vary by state, with Indiana reporting some of the lowest and California and Texas among the highest.
- Over-payment refunds are inconsistent; Florida law now requires reimbursement within 30 days of an over-payment determination, while other states lack clear mandates.
Official Statements & Responses
Mayo’s communications director, Andrea Kalmanovitz, said the clinic regrets that Zordani’s experience fell short of the organization’s communication standards.
Richard Gundling, senior vice president of the Healthcare Financial Management Association, described the trend as patients “basically being asked to self-insure.”
Chip Kahn, a visiting senior fellow at KFF and the American Enterprise Institute, warned that preservice deposits are likely to become more common.
Matthew Fiedler, senior fellow at the Brookings Institution, noted that federal Medicare rules prohibit upfront payment in emergencies, but “in out-of-network settings, I’m not aware of any barriers that would prevent a provider from doing this.”
Criticism & Opposition
Diane Spicer, supervising attorney for Community Health Advocates, highlighted that insured individuals seeking out-of-network care often encounter surprise deposits, sometimes for services not covered at all.
Patricia Kelmar, senior director of healthcare campaigns at the Public Interest Research Group, called the calculation methods “opaque,” noting that providers can set arbitrary amounts without clear linkage to deductible balances.
Verbatim Quotes
- “We regret that this individual's experience did not meet the high standard of communication we strive to provide when helping our patients understand their insurance coverage and financial responsibility,” — Andrea Kalmanovitz, Mayo
- “Things like preservice deposits and those kinds of moves are probably going to become more and more likely,” — Chip Kahn
- “We see this mostly with insured folks who are seeking out-of-network care but who have out-of-network coverage,” — Diane Spicer
- “Had they notified me in timely fashion as required, I would not have flown there,” — Thomas Zordani
Conflicting Reports & Gaps
State-level data on over-payment refunds are fragmented, leaving patients uncertain about reimbursement timelines outside of Florida.
What’s Next
Several states are moving to limit pre-payment practices. Maryland prohibits hospitals from requiring deposits solely to avoid offering financial assistance. Arizona Attorney General Kris Mayes recently settled a consumer-protection suit against SimonMed Imaging, mandating average refunds within 60 days. These actions suggest growing scrutiny of upfront payment policies as deductibles continue to rise.
