[id10t]

The way it works is that hospitals charge whatever they like. Insurance is billed at "reasonable and customary rates" - state/region average, etc. - , and patient is billed for deductible/copay. Because the ins. co has to pay sooo much money out, they've agreed and contracted with the hospitals to pay X% on billed amounts, *if* they pay within 30 days of claim submission. If they don't pay by then, then they are back to paying the full amount billed to them.

Unfortunately, your friend has not signed a contract, etc. to get that discount. Good news is that he's not in trouble yet (is he?) and he can work with a lawyer/accountant type person to protect major assetts like home, etc. Bad news is he's gonna be getting som e major bills. Other good news is most hospitals are required to take any payment offered and not hound you for the rest, as long as payments are made regularly.

A friend collects large debts for hospitals from insurance comps and he explained it all to me. He also had a bad health period wtih no or minimal insurance, and he is happily paying off $75 per month to his bill. It doesn't show on credit report, etc. as far as I know, or rather, he's had no problem buying a car or refinancing his home.