Samantha Smith of Harrisburg, Pennsylvania, went into the operating room for emergency removal of an ectopic pregnancy. “I’m grateful I didn’t die,” she said, but she was shocked to see that the outpatient surgery was billed to her insurer for about $100,000.
Jamie Estrada of Albuquerque twice received injections of lidocaine in his upper spine to test if a permanent nerve ablation would treat his chronic neck pain. His pain vanished — until the numbing agent wore off about six hours later. The real zinger: His insurer was billed $28,000 for each 10-minute procedure.
Mark McCullick of Longmont, Colorado, was sent for a whole-body PET scan to find out whether his prostate cancer was back. The two-hour scan showed no evidence of cancer, but the $77,000 bill sent to the company that administered his insurance alarmed him.
Medical inflation has steadily outpaced general inflation for years, with bills for many brief, routine procedures reaching tens of thousands of dollars.
These cases highlight the questions that haunt the American health system and the patients caught in its grip: What is a reasonable price for any health care visit or procedure, and how is it determined? How hard do insurers, the purported stewards of the patient’s hard-earned health dollars, fight to lower charges, and how closely do they scrutinize bills for accuracy?
Smith, Estrada and McCullick’s cases are all “chargemaster” bills, calculated from the master price list that health providers place on services. Patients who have insurance don’t generally pay them. But they matter because they are often the starting point for the negotiated price the insurer agrees is reasonable to pay for the services. Patients are typically responsible for 10 to 20 percent of the negotiated price, their coinsurance — and when prices are this high, that can be a big number. What’s more, those negotiated rates are difficult for patients to access (until they get the bill) and seemingly arbitrary.
Because health insurers can offset high outlays one year by raising premiums and deductibles the next, they have little incentive to bargain hard for good deals for the patients they cover. So patients all pay unknowingly, indirectly.
In the cases of Smith and Estrada, their insurers paid the majority without questions. Penn State’s Hershey Medical Center, which treated Smith, received $61,000, or 62 percent of what it charged. New Mexico Surgery Center Orthopaedics, which treated Estrada, received $46,000, or 82 percent.
McCullick’s insurer, on the other hand, said it would pay Intermountain Health just 28 percent of his $77,000 bill. Then came another curveball: The hospital, which said it had gotten preauthorization, discovered after the fact that his scan was not covered. So it billed McCullick the full chargemaster rate of $77,000 — or, it offered, he could pay the cash rate of $14,259.
In an emailed statement, Chris Bond, a spokesperson for AHIP, the leading trade group for health insurers, blamed hospitals for the trouble, saying that plans are “focused on making benefits and coverage as affordable as possible for their members,” and that: “As the largest single category per premium dollar spent, increases in the cost of hospital-based care have an outsized impact on premiums.”
In a health system in which prices can vary exponentially with little transparency, how can patients afford to get sick?
‘It makes no sense’
Americans listed health care as a top priority for government in 2026, according to an Associated Press-NORC poll, expressing particular concern about cost, access and insurance coverage.
The first Trump administration required insurers and hospitals to publish files containing cash, gross and negotiated prices for various items and services. These raw, machine-readable price lists — often hundreds of pages filled with medical billing codes — have proved of little use to patient-customers.
Five years later, they’ve been ingested, parsed and enriched by academics and start-ups, shedding light on the often-shocking disparities in prices and how they’ve come to exist.
“When we look at the data, whether it’s from a chargemaster or what insurers paid, it’s all over the map — it makes no sense,” said Marcus Dorstel, senior vice president of operations at Turquoise Health, a price transparency start-up with payers and providers as clients. “The variation is huge, even in a specific area.”
When researchers at the Johns Hopkins Bloomberg School of Public Health looked at the data, they discovered that the price different insurers pay for the same billed charges “can be three or more times different at the same hospital,” said Ge Bai, a professor of health care accounting who was among the researchers.
The prices insurers pay are determined by numerous factors, including what’s in their contracts with health systems. Some health plans, such as Smith’s, automatically pay a percentage of the hospital’s billed charges, incentivizing hospitals to increase their rates. Hershey Medical Center increased its prices for 11 common hospital billing codes by an average of about 30 percent from 2023 to 2025, Dan Snow, a data scientist at Turquoise Health, calculated for this article. But those prices were not much different from those of other hospitals in Pennsylvania.
In other cases, an insurer might agree to pay a health system a case rate — a standard rate for a type of care, say a colonoscopy or an inpatient stay for pneumonia.
But there’s a lucrative catch, called a “carve-out,” which refers to a particular benefit that’s negotiated and paid separately. If the hospital used expensive drugs or devices, for instance, they can be billed in addition to the bundled case rate, with no limits on hospital markups. That was the case with McCullick’s PET scan; about 80 percent of the charge was not for the scan but for a new kind of drug injected before the scan to detect cancer.
Most often the final prices depend on the relative negotiating power of the insurer and the health system: Which side has enough market sway to walk away if the other doesn’t meet its demands?
Such factors “can explain the price variations and patterns that we see,” Dorstel said. “In some markets insurers are price-makers, and in others they are price-takers.”
For insurers, paying more is profitable
Insurers aren’t incentivized to lower prices, because high prices mean they “get a slice of a bigger pie,” Bai said.
By law, insurers must spend 80 or 85 percent of premiums on patient care. But when prices rise, they can pass on the increase to customers in the form of higher premium costs and still meet their legal obligation. So higher premiums mean less money for the patient and more profit for the insurer.
For each spinal injection Estrada received, his insurance company’s contracted rate was $23,237.50. Estrada’s coinsurance was $5,166.20. With a high-deductible plan, he was asked to pay all of that more than $5,000 bill.
When he called to challenge the bill, he said, the surgery center’s administrator told him the charges were the result of a “legacy contract” with the insurer that is “advantageous” and “favorable” to the center.
New Mexico Surgery Center Orthopaedics’ charges are many times those of the hospital where the center’s doctors admit patients, for example; there, Estrada’s insurance company’s contracted rate for the same spinal injection is $2,058.67. And compared with the roughly $20,000 the insurer paid for each of Estrada’s injections, other insurers pay the center about $700 for the same procedure, Snow found.
The surgery center, United Surgical Partners International, is part of a national group that owns more than 535 surgical facilities, which in turn is owned by Tenet Healthcare, a for-profit health conglomerate. That kind of market dominance can lend companies the negotiating power to charge — and get paid — what they want, Bai said.
United Surgical Partners International and Tenet Healthcare did not reply to multiple requests for comment from KFF Health News.
With charges prenegotiated, insurers have little incentive to scrutinize questionable bills. When Smith asked for an itemized bill for her surgery, she discovered that she had been billed for two surgeries: one for the ectopic pregnancy removal and another because the surgeon noticed signs of endometriosis and performed a biopsy. Both were billed at the contracted rate of $37,923.
She was livid at the charges, which to her seemed like double-dipping. “That was one surgery,” she said. “There was one incision.”
A Yale University-trained lawyer, Smith consulted the federal Centers for Medicare and Medicaid Services’ correct coding guidelines, which note the two billing codes used for her surgery generally can’t be “billed together for the same patient encounter” because one more or less is bundled with the other.
Smith said she contacted the Penn State hospital, the insurer and even the state attorney general but did not get a resolution. So she expects she will, reluctantly, have to pay the $5,250 coinsurance that the hospital and insurer say she owes.
In response to questions from KFF Health News, Scott Gilbert, a spokesperson for the health system, did not respond to the specifics of this case, but wrote: “Penn State Health recognizes that health care billing can be confusing and often overwhelming for patients. The process involves many factors, including the type of care provided, where it’s delivered and the details of a patient’s insurance coverage.”
A ‘reasonable’ price?
After a reporter sent multiple inquiries to Intermountain Health, McCullick said an agent asked him what would be “a reasonable amount to resolve the situation.”
Sara Quale, a spokesperson for Good Samaritan Hospital, the Intermountain affiliate where he got the PET scan, wrote: “We sincerely regret the frustration this situation has caused Mr. McCullick,” noting that “we have been in consistent contact with him and will continue to follow up as needed.”
McCullick said he wants to pay his fair share but is still trying to figure out what that is — certainly less than the different self-pay prices he’s been offered, which all top $10,000. “The fluid nature of these numbers is mind blowing,” he wrote in an email.
As for Estrada, he was so angry that he decided not to go ahead with the nerve ablation. While he was being prepped for the procedure, Estrada recalled, the physician said he had “heard he might sue” and chastised him for being a troublemaker. The hospital did not respond to a request for comment on the allegations, and Estrada said he had never threatened legal action.
Estrada got off the table and put his shirt back on. “I’m not going to let this person put a big needle into my back.”
Elisabeth Rosenthal is senior contributing editor for health news analysis at KFF Health News and the creator of Bill of the Month, a crowdsourced investigation by KFF Health News and The Washington Post that dissects and explains medical bills. This month marks the series’ eighth anniversary. Since 2018, this series has helped many patients and readers get their medical bills reduced, and it has been cited in statehouses, at the U.S. Capitol, and at the White House. Do you have a confusing or outrageous medical bill you want to share? Tell us about it.
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