ABSTRACT

A growing number of hospitals and medical providers across the United States are requiring patients to pay deposits before receiving non-emergency care, a practice that consumer advocates and industry analysts say is becoming more common as patient deductibles rise and providers seek to reduce uncollected debt.

CBS News

Hospitals increasingly require upfront payments from patients before treatment is delivered

Aug 12, 2026, 5:00 AM

Context

Thomas Zordani, a Denver resident, traveled to a Mayo Clinic facility in Phoenix in early April 2024 for a neurosurgery consultation after being told the clinic was within his insurer's network. Upon arrival, he was directed to the clinic's financial office and told he owed a $5,000 preservice deposit because Mayo had since determined it did not accept his insurance. He was classified as self-pay, despite having out-of-network benefits under his plan. He declined to pay, and his appointment was canceled.

Zordani later discovered that Mayo had sent him a cost estimate of $565 through his insurer's patient portal shortly before his visit — substantially less than the $5,000 subsequently demanded. He filed a complaint in Arizona civil court, and an arbitrator in September 2025 awarded him $47,500 in economic damages and attorney fees, finding that Mayo had violated a state consumer fraud law by failing to notify him that his plan was not in-network before he traveled. Mayo's statement to KFF Health News did not reference the settlement.

Mayo Clinic's website states that it requires prepayments in various circumstances, including for out-of-network insurance plans. Johns Hopkins Medicine's website states that 'it is our policy to collect all amounts owed before services are rendered' for non-emergency care. MD Anderson Cancer Center in Houston states that patients who pay for their own care 'will be asked to pay an initial deposit determined by the care center, based on the type of cancer.'

On average, hospitals collect approximately one quarter of what they estimate a patient will owe out of pocket, up from figures that were previously closer to 15%, according to data from Kodiak Solutions, a technology company serving health systems. Kodiak's analysis drew on data from more than 2,300 hospitals nationwide.

A Kodiak report issued in June attributed rising uncollected hospital debt — occurring even as upfront collections increase — to a 'fundamental shift' in insurance coverage toward higher deductibles, greater coinsurance, and more complex cost-sharing structures.

The average deductible in employer-sponsored family coverage is $3,762 per person, according to KFF. The average deductible in Affordable Care Act marketplace plans rose 37% this year to $3,786. A recent KFF health tracking poll found that lower out-of-pocket costs was the top change insured adults said they wanted from their coverage.

Federal law prohibits hospitals that accept Medicare from demanding upfront payment before stabilizing a patient who arrives at an emergency room. Consumer protections in non-emergency, out-of-network settings are less defined, according to a senior fellow at the Brookings Institution cited in the report. How preservice deposit amounts are calculated is largely left to providers and can be unclear to patients.

Consumer advocates recommend that patients ask for an itemized bill and contact their insurer to determine whether it has rules governing preservice charges. Overpayments — which can occur if services differ from estimates or if insurers apply other payments toward a deductible first — may take varying lengths of time to be refunded, depending in part on state law.

Florida now requires medical providers to reimburse patients within 30 days of determining an overpayment. Maryland prohibits certain hospitals from requiring prepayment in a way that circumvents financial assistance eligibility. Arizona Attorney General Kris Mayes recently filed suit under state consumer protection law against SimonMed Imaging, alleging some patients waited more than a year for reimbursements. SimonMed agreed in a settlement to issue refunds within an average of 60 days.

Zordani ultimately underwent a procedure for a spinal fluid leak at a Denver hospital in late June 2024, after finding a different specialist following his return from Phoenix.

All Perspectives

Mayo Clinic: Andrea Kalmanovitz, Mayo's communications director, said in an emailed statement: '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. When prospective patients don't have clarity that Mayo Clinic is not in-network with their health plan, unexpected pre-service deposit requests may result.' Mayo's statement did not reference the arbitration settlement.

Thomas Zordani (patient): Zordani said he was told when making the appointment that Mayo was in his insurer's network, and that had he been notified in a timely manner that it was not, he would not have traveled to Phoenix. He said he remains unclear on how the $5,000 preservice amount was calculated and is still angry that Mayo designated his care as self-pay without his consent.

Richard Gundling, Healthcare Financial Management Association: Gundling, a senior vice president at the organization, said preservice deposits cannot be viewed in isolation and described the broader challenge as: 'How do we maintain access to care when more patients can't absorb the level of out-of-pocket costs?' He said patients are 'basically being asked to self-insure.'

Chip Kahn, KFF / American Enterprise Institute visiting fellow: Kahn said practices like preservice deposits 'are probably going to become more and more likely' as hospitals face tighter margins and rising patient cost-sharing. He said the trend 'will make it harder on the provider, the clinician, and harder on the patients,' and that hospitals 'have to be concerned' about every cost-sharing dollar, particularly as potential cuts to ACA and Medicaid funding could increase the number of uninsured patients.

Matt Szaflarski, Kodiak Solutions: Szaflarski, a vice president leading Kodiak's revenue cycle intelligence team, said preservice deposit practices are 'becoming more and more the center of many of our conversations with health systems.' He noted variation by geography, citing Indiana as having among the lowest upfront cash collections and California and Texas among those collecting more.

Matthew Fiedler, Brookings Institution: Fiedler, a senior fellow and health policy researcher, said that in out-of-network settings, he is 'not aware of any barriers that would prevent a provider from doing this' with respect to preservice deposits. He noted that the one clear rule is the federal prohibition on demanding upfront payment before stabilizing emergency room patients at Medicare-participating hospitals.

Patricia Kelmer, PIRG: Kelmer, senior director of healthcare campaigns at the national consumer advocacy federation, said the basis for preservice deposit amounts can be opaque to patients, noting that a patient might be scheduling months in advance and a provider would not know how much deductible remained. She recommends that consumers request an itemized bill and contact their insurer to determine whether rules govern the charges.

Diane Spicer, Community Health Advocates (New York): Spicer, a supervising attorney at the health insurance consumer assistance program, said the organization hears from people concerned about prepayments, 'mostly with insured folks who are seeking out-of-network care but who have out-of-network coverage,' and sometimes for care that is not covered at all.

Gaps & Unknowns

No comprehensive national data exists on how many hospitals currently collect preservice payments, according to the source.
The methodology Mayo used to calculate the $5,000 deposit figure is not explained in the source.
SimonMed Imaging's position or response to the Arizona attorney general's allegations is not included in the source.
The source does not report whether other major insurers have formal policies or contractual provisions addressing preservice deposit practices.
The source does not indicate whether Zordani's insurer took any action or had relevant contractual provisions that could have applied in his situation.

Sources & Further Reading

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