Thomas Zordani flew from his home in Denver to Phoenix for a consultation with a Mayo Clinic neurosurgeon about debilitating headaches. He said he had been told at the time of booking that the clinic was in his insurer's network. On arrival, staff directed him to the financial office and told him he owed a $5,000 pre-service deposit because Mayo had since determined it did not accept his plan. He was designated a self-pay patient even though his coverage included out-of-network benefits. He refused, and the appointment was canceled.
His case, reported by KFF Health News, illustrates a billing practice moving from the margins of American health care into routine use. Providers are increasingly asking insured patients to pay an estimated share of the bill before care is delivered, and the practice is no longer confined to elective procedures.
For households, this changes the order in which medical decisions are made. The question is no longer only whether a treatment is covered. It is whether a family can produce cash on the day of the appointment.
The Difference Between a Copay and a Deposit
A copay is a fixed amount set in an insurance contract, typically a modest sum collected at the front desk. A pre-service deposit is different. It is the provider's estimate of what the patient will eventually owe, collected before any care is provided.
The amount may represent a remaining deductible, a percentage of the expected charge, or a figure the billing office reaches through its own formula. How those amounts are calculated appears to be largely up to the provider and can be opaque. Patricia Kelmar, senior director of health care campaigns at the consumer federation PIRG, told KFF Health News that a patient who is handed a number often cannot tell whether it represents a percentage, a deductible balance, or something else. She recommends asking for an itemized bill and calling the insurer to ask whether it has rules about such charges.
The timing compounds the confusion. A patient scheduling a procedure three months out is being quoted a deductible balance the provider cannot yet know, because other claims may post in the interim. In Zordani's case, he later found that Mayo had sent him an estimate of $565 through his insurer's patient portal shortly before the visit, far below the amount the financial office demanded.
Where the Practice Has Spread
Several major systems disclose prepayment policies publicly. Mayo Clinic states that it requires prepayment in a range of circumstances, including for patients whose plans are not under contract with the system. Baltimore-based Johns Hopkins Medicine says its policy for non-emergency care is to collect amounts owed before services are rendered. MD Anderson in Houston, one of the country's leading cancer centers, says patients paying for their own care will be asked to pay an initial deposit set by the treating center, depending on the cancer type.
No one knows precisely how many hospitals collect these payments, because the figures are not centrally reported. Matt Szaflarski, a vice president who leads the revenue cycle intelligence team at Kodiak Solutions, told KFF Health News that hospitals now, on average, collect roughly a quarter of what they expect a patient to owe up front, a share that has grown in recent years. On a scan, the insurer will reimburse $1,000; that means about $250 at the door, whereas in his account the figure once sat closer to $150. Collection intensity also varies by hospital and, at times, by state.
The pressure behind the shift is measurable. The average deductible in employer-sponsored family coverage now runs $3,762 per person, and average deductibles in Affordable Care Act marketplace plans rose 37 percent this year to a record $3,786, according to KFF. Richard Gundling, a senior vice president at the Healthcare Financial Management Association, said patients are "basically being asked to self-insure."
Refunds, Overpayments and a Thin Layer of Law
One rule is unambiguous. Under federal law, hospitals that accept Medicare financing cannot demand payment before stabilizing a patient who arrives at an emergency department. Emergency care is protected.
Outside the emergency room, protections thin considerably. Matthew Fiedler, a senior fellow and health policy researcher at the Brookings Institution, told KFF Health News he is not aware of any barriers that would prevent a provider from requiring a deposit in out-of-network settings. Patients receiving in-network care may have some recourse through their insurer's contract, which is why reading plan documents matters.
Overpayment is the recurring problem. If an anesthesiologist's bill or a surgeon's fee posts to the deductible first, a patient who already prepaid the hospital for that same expected deductible has now overpaid. How quickly the money comes back varies, and only a small number of states address the question directly. Florida began requiring providers this year to refund patients within 30 days of a determination that an overpayment occurred. Maryland is among the states that bar certain hospitals from requiring prepayment as a way to sidestep financial assistance obligations. Arizona Attorney General Kris Mayes sued the imaging chain SimonMed under state consumer protection law after alleging that some patients waited more than a year for reimbursement, and the company agreed in a settlement to issue refunds within an average of 60 days.
Most states have no such rule.
Questions Worth Asking Before the Appointment
Patients facing a deposit request can ask the provider to explain in writing how the figure was calculated and whether it represents a deductible balance or a percentage estimate. They can call the insurer to confirm network status independently, since a scheduler's assurance is not a guarantee. They can ask whether the provider allows a card on file to be charged only after the claim is processed, which avoids overpayment entirely.
Nonprofit hospitals are required under federal tax rules to maintain written financial assistance policies, and those policies apply regardless of what a billing office says at check in. Asking for the policy in writing is reasonable and free.
Declining to prepay carries real consequences, including a canceled appointment. Patients weighing that choice should consider the clinical urgency of the visit. Anyone whose care is time-sensitive should raise that with the clinical team rather than the billing office.
Zordani eventually found a specialist in Denver and had a procedure to repair a spinal fluid leak. He later filed a complaint against Mayo in Arizona civil court and was awarded $47,500 in economic damages and attorney fees after an arbitrator found that the clinic had violated a state consumer fraud law by failing to notify him of his network status before he traveled. Mayo told KFF Health News it regretted that the experience fell short of its standards for helping patients understand coverage and said that unexpected deposit requests can occur when prospective patients lack clarity about network status.
The pressure is unlikely to ease. As coverage shifts more cost onto patients, providers have more reason to collect early, and households have less cushion to absorb the demand.
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Key Questions Answered
What is a pre-service deposit? It is a payment a hospital or clinic asks for before delivering care, based on the provider's own estimate of what the patient will owe after insurance. It is not the same as a contractual copay, and the amount is largely left to the provider to determine.
Is it legal for a hospital to require payment before treating me? In non-emergency settings, generally yes. Federal law prohibits demanding payment before stabilizing a patient in an emergency department at a hospital that accepts Medicare. Outside that setting, protections depend on state law and on the contract between the patient's insurer and the provider.
What happens if I overpay? The provider owes the money back, but the timeline varies and few states set one. Florida now requires refunds within 30 days of a determination that an overpayment occurred. Patients should keep receipts and follow up in writing.
Can I refuse to pay a deposit? Yes, though the provider may cancel or reschedule the appointment. Patients with urgent clinical needs should tell the care team directly rather than resolving the issue only with the billing office.
Which patients are most exposed? People seeking out-of-network care, people with high-deductible plans, self-pay patients, and anyone scheduling expensive services.
What should I ask before an appointment? Ask how the deposit was calculated, confirm network status with the insurer directly, request the hospital's financial assistance policy in writing, and ask whether payment can be deferred until after the claim is processed.
Where can I get help with a disputed bill? State consumer assistance programs, state attorney general offices and nonprofit patient advocacy groups handle billing complaints. Hospital financial counselors can also review eligibility for assistance or payment plans.
