What insurance actually pays you | OpenDoc for providers
A contracted rate is not what you keep — denials, uncollected patient balances, billing cost and the wait all come out first. Here is the arithmetic, with sources.
The gap nobody adds up
A contracted rate is not what a practice keeps. Four deductions come out first, and they arrive separately enough that they rarely get totalled in one place: claims denied on first submission (mostly worked and paid, but with staff time, and a share never returns), patient balances that go uncollected as deductibles grow, the cost of billing itself, and the wait — during which an adjudicated payment remains a provisional credit that can still be recouped.
Published billing and insurance-related costs run from about 3% of professional revenue for inpatient surgical work to about 25% for an emergency department visit, with a primary care visit near 14.5% (Tseng P, Kaplan RS, Richman BD, Shah MA, Schulman KA. JAMA. 2018;319(7):691–697). Prior authorization adds roughly 13–16 hours of physician and staff time per week (American Medical Association annual survey) and is not included in the arithmetic below.
A worked example
Illustrative only, using mid-range published figures. It is not a claim about any particular practice. A $500 contracted rate with 20% patient responsibility, a 12% first-pass denial rate, 55% of patient balances collected, billing at 14.5% of collections and 40 days to payment nets roughly $371 — about 74 cents on the contracted dollar, roughly six weeks later, and still revocable.
What that means for a posted cash price
A practice keeping 74 cents on the dollar reaches net-parity at 0.74× its contracted rate — and it receives all of that, because OpenDoc's fee is a markup added to what the patient pays, never a deduction from the posted price. At that price the patient is charged about $389 on a visit the practice brings itself (5% fee) or about $445 through OpenDoc search (20% fee), both still below the $500 contracted rate. That is a break-even, not a recommendation: OpenDoc does not suggest, benchmark, or compare what a provider should charge. The posted price is the provider's alone to set, and it is the same price for every patient.
The room to post below a contracted rate comes from removing the cost of getting paid — no claim, no denial, no appeal, no statement cycle, no collections. It does not come out of the practice's margin.
Medicare
This arithmetic applies to commercial and direct-pay volume only. Providers who participate in Medicare generally cannot accept cash for Medicare-covered services; narrow exceptions exist and are for each practice to determine with its own advisors. Nothing on this page is legal, tax, or financial advice.