It works: you still have to pay, but you pay less than usually you would- I just verified that (I killed Guy and Niven in battle, was asked to pay 250 gold, spent almost all my gold and another option came up in the dialogue tree "can't you make an exception?", and to which Negatus offered to revive teammates for 150 gold), but for that you do actually need to have insufficient money to revive the fallen comrades-in-arms.
