3-minute read
When it comes to healthcare, one of the biggest frustrations for employers and employees alike is this: no one seems to know what anything actually costs — until the bill shows up.
And too often, that bill is outrageously high.
It’s not uncommon for the same procedure to cost $2,000 at one facility and $12,000 at another — even within the same ZIP code. Traditional health plans typically “negotiate” with providers behind the scenes, but those prices are still marked up and vary wildly depending on the carrier, provider, and region.
This is where negotiated pricing — done on your terms, outside the carrier’s network — can be a game-changer.
What Is Negotiated Pricing?
In simple terms, negotiated pricing means agreeing on the cost of care upfront between a provider and your third-party administrator (TPA), bypassing the inflated, opaque pricing system built by insurers. There’s no mystery, no middleman markup, and no surprise bills.
Also read: Transforming Your Company Health Plan: Proven Solutions for Cost Control and Better Care
You know what a procedure is going to cost before it happens. So does your employee.
And best of all? It’s almost always significantly less than what you’d pay under a traditional PPO plan.
Let’s say one of your employees needs a diagnostic scan or outpatient surgery. Under the usual model, they’d be at the mercy of their carrier’s “network rate,” which might still be more than what the provider would accept for cash. Worse, they might not even see the bill until weeks later.
With negotiated pricing, your TPA or plan partner contacts a high-quality provider directly, asks for a bundled price, and locks it in before any care is delivered.
It’s fast, it’s clean, and everyone involved knows exactly what to expect.
Why It Matters
For employers who are self-funded or considering making the switch, negotiated pricing gives you the transparency and control you’ve been missing.
- Predictable Costs: You eliminate surprise billing and budget-killing outliers.
- Lower Prices: Providers often prefer prompt, direct payment — which opens the door to better deals.
- Happier Employees: No more confusing EOBs or unexpected bills. Just clear pricing and a smoother experience.
- Smarter Plan Design: You can build incentives into your plan to encourage employees to use pre-negotiated providers — driving costs down across the board.
But Does It Actually Work?
Yes. We’ve seen employers save thousands per episode of care, especially for high-cost outpatient procedures and diagnostics. One client saved over 50% on a scheduled surgery simply by letting us pre-negotiate the price with a local provider.
No network games. No red tape. Just real savings and better outcomes.
If you’re tired of watching your premiums climb every year while your employees struggle with coverage they can’t afford to use, it’s time to consider smarter strategies.
Negotiated pricing is one of them — and when combined with tools like cash pay, direct primary care, and reference-based pricing, it’s part of a bigger, better way to do healthcare.
Let’s talk about how to make it work for your team.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. For more information, visit our website or call 877-440-3304.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.