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Smart Money

How to Negotiate Medical Bills

Before you put all your savings toward a medical expense, make sure you’ve exhausted all your options for lowering the costs of a medical bill.

Katana Dumont • June 30, 2022

In This Article

  1. Can You Negotiate Medical Bills?
  2. Preliminary Steps to Negotiate Medical Bills
  3. Ways to Negotiate Medical Bills
  4. FAQs
  5. Final Thoughts

Medical bills are the last thing you should have to worry about after an unexpected medical emergency or complications with your health. According to the Peter G. Peterson Foundation, the U.S. has one of the highest costs of health care in the world: “In 2020, U.S. health care spending reached $4.1 trillion, which averages to over $12,500 per person.”

Staggering medical bills can really damage one’s financial health and mental well-being. But, if you find yourself in this situation, don’t panic. There are ways to negotiate a medical or hospital bill — the costs aren’t always definitive. 

Here are some steps you can take to be certain that you aren’t paying more than you have to for medical services.

Can You Negotiate Medical Bills?

Not being able to afford a hospital bill is a real concern for many people. But before you even step foot into a hospital, there are some things you can do to better ensure that you’ll be able to handle the costs of medical services. 

  • Research service costs ahead of time: Do some digging online or call up the health care provider and ask about pricing beforehand. When you receive a diagnosis or recommendation for a procedure, it can be helpful to become more informed on what the estimated costs may be.
  • Use in-network care providers: You can save money on medical bills just by using in-network care providers. Different rates may be charged depending on whether you’re insured, in-network or out-of-network. If you’re not insured, see if you qualify for Medicaid or ask to pay the same amount as insurance companies.

Of course, you won’t always be able to foresee a medical emergency ahead of time, so there’s only so much these precautionary measures can do for you. If you’ve taken these steps and you find that the costs of medical services for you or a family member are too expensive to pay, remember that you still have options. There are ways to get your bill reduced, negotiated, or in some cases, forgiven. 

Preliminary Steps to Negotiate Medical Bills

Before you start the negotiation process, you’ll want to take these fundamental steps in order to properly prepare. 

Ask for an Itemized Hospital Bill and Check for Errors

Don’t assume that your bill will always reflect the accurate amount of money you owe. As many as 80% of medical bills contain errors. Medical administrators can make mistakes when calculating your expenses, so be sure to ask for an itemized bill from your health care provider. An itemized bill will contain line items of everything you’re being charged. Review the bill for errors, such as incorrect patient, provider, or insurance information, services or medication you didn’t receive, or duplicate charges. 

Look Over the Explanation of Benefits (EOB)

After you’ve received medical care, your insurance company should send you an explanation of benefits (EOB). An EOB isn’t a bill (though it may look like one). It’s a statement that breaks down what medical treatments and/or services the insurance provider covered on behalf of the patient. You should compare the EOB to your itemized medical bill to look for discrepancies. If you discover that you’re not receiving the full benefits to which you are entitled under your insurance plan, contact your insurance company to sort it out. You may need your EOB when you speak to your insurance company or your health care provider, so be sure to save it.

Seek Medical Care Elsewhere

As long as it’s not an emergency, you should have time to “shop around” for other service providers who may be able to offer more affordable options. Many insurance companies offer cost estimates for services, and some companies even offer cost comparison tools to help you find the best price on a medical service you need. You could also try third-party websites, like GoodRx and Healthcare Bluebook. These free tools allow you to compare the cost of treatment and prescription medicines.

Consider Opening a Health Savings Account

A health savings account(HSA) can help you save for qualified medical expenses. HSAs can help you pay for certain medical, dental, and vision costs, as well as those of your spouse, children, or other eligible dependents.

Ways to Negotiate Medical Bills

Ask in Advance for Assistance Programs

The majority of health care providers and facilities have programs in place to help patients with their financial expenses. But they don’t always tell you about them, so don’t be afraid to ask. The important thing is to ask as early on as possible, so you can get help before your debts become delinquent.  

Check with your health care provider to see what they offer. Some hospitals have an uninsured discount for patients who don’t have adequate access to health insurance, and there’s even the possibility of medical debt forgiveness. Even if you do have insurance, the billing department may grant you a reduced fee based on your income level or if you can prove the expense is causing you financial hardship. If you are in this situation, make sure to come prepared with official documents that can prove you can’t afford your medical bills.

Set Up a Payment Plan

Before charging medical expenses to a credit card, you should ask your medical provider about potential payment plan options. No-interest repayment plans are typically offered by health care providers to anyone who needs them. This can be a better route to take than credit cards or medical loans, as you can likely bypass interest charges — payment plans with hospitals only charge the principal amount, which you pay back over a set period of time.

Make sure you choose a repayment plan that you can reasonably afford to pay off. If you can’t make the monthly payments, then your hospital bill may be sent to a collections agency. Budget accordingly for other monthly expenses such as mortgage/rent, car loans, and utilities. These sorts of debts should be treated as a higher priority than medical bills because non-payment could seriously impact your immediate circumstances, such as resulting in an eviction.  

Offer to Pay Upfront for a Discount

This won’t be a feasible option for everyone, but if you have the funds on hand to pay most of your medical bill upfront, try to make a deal with your health care provider. You can reach out to the billing department and offer to pay most of the bill immediately. Also, if you can pay in cash, some doctors’ offices will discount bills for patients paying with cash because it eliminates their need to file insurance claims and pay credit card transaction fees.

Enlist the Support of a Professional Negotiator or Advocacy Group 

While you could negotiate your medical bills on your own, there are professional medical bill negotiation companies that could do it for you. Companies like CoPatient, ClaimMedic, and Medgotiate will try to get medical bills lowered in exchange for a portion of the savings, often around 30% to 60%.

In addition to bill negotiation companies, there are also patient advocacy nonprofits that you can reach out to. Patient advocacy groups offer programs and financial assistance resources to help patients who are facing financial troubles. One example is the Patient Advocate Foundation, a national organization that advocates and mediates on behalf of patients dealing with financial health care burdens and insurance issues.

FAQs

What if I can’t pay my hospital bill?

If you don’t pay your medical bills or negotiate with your health care provider, the amount you owe will be sent to a collection agency. Individuals with medical debt have about 6 months to fix insurance or billing problems. After the grace period ends, having your debt sent to collections will ding your credit score, and the entry will remain on your credit report for up to 7 years or more. If you still don’t pay, you can be sued by the debt collector or service provider, which means you’ll have to go to court. If you’re found liable for the debt, the court may issue an order to garnish your wages.

How do I negotiate medical bills in collections?

If your medical bill has already gone to collections, you can still negotiate with a creditor for a low-interest or interest-free payment plan with affordable monthly installments. 

How do I pay medical bills without insurance?

If you don’t have insurance and can’t afford coverage, see if you qualify for Medicaid. In some states, Medicaid coverage works retroactively and can pay for medical bills incurred for the past 3 months.

How do I dispute a hospital bill?

If you think your hospital bill is incorrect, let your provider know right away so they can review and remedy any errors. If you need more evidence, you can file a request for the medical records of your visit at your doctor’s office or hospital. After you’ve gotten your medical records, you can use them to support your case. If the billing department still refuses to make the requested changes, you can file an official claim in small claims court. 

Final Thoughts

Bottom line: When it comes to paying your medical bills, always research and ask what your options are. If you don’t ask, then you’ll likely get stuck with an outrageously high medical bill. And don’t ever ignore the bill, as it will just hurt you in the long run. It can lower your credit score, garnish your wages, and have you dealing with debt collectors. You’re much better off getting ahead of the issue now and starting the negotiation process with your health provider.   

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