How to Negotiate Your Medical Bills
We negotiate lots of things: the price of a car, our salary at a new job, what we'll pay for a flea-market find, and who is going to empty the smelly litter box… So why not haggle over our medical bills? Yes, it can be done. More than 90% of people in the US who've negotiated a medical bill have had that bill reduced, according to a recent LendingTree survey.
"The billing departments of health care facilities and medical offices are used to negotiating," says Michelle Rice, chief external affairs officer at the National Hemophilia Foundation. "So don't hesitate to ask for a reduction if a medical bill is too high for you or your family."
The odds are in your favor that if you do a little groundwork you can wriggle out from underneath the full weight of a hefty bill. And medical bills can be weighty: More than two-thirds of people with medical debt say they've lost sleep worrying about how they'll pay that bill off. Here's how you can knock some serious dollars off your amount due.
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Don't pay the bill…yet
Put that wallet away! You don't want to pay any part of that bill until you've completed your negotiations, according to the National Consumer Law Center.
Don't worry: The three major credit reporting agencies don't report nonpayment on medical bill information for 180 days, and hospitals are unlikely to immediately sic a creditor on you anyway. Plus, medical debt is treated differently than other types of debt. Yes, you should make a plan to negotiate sooner rather than later, but you can take a deep breath.
Check the bill for accuracy
"The first step when negotiating medical bills is to ensure there aren't any mistakes," says Andrew Latham, personal finance counselor, a finance analyst, and the managing editor of SuperMoney.com.
Nearly 80% of medical bills contain erroneous charges, according to Becker Hospital Review. "Billing errors are common, and they are rarely in your favor," Latham says. You can check the billing codes against the three systems used in the health care industry.
While scouring your bill also keep an eagle eye out for duplicate charges and procedures that weren't even performed, Latham says. If you find an error, call your health care provider and ask them to recode and re-bill your insurance company.
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See if you're Medicaid-eligible
If your high bill is a result of not having health insurance and you 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 three months.
Ask for a reduced fee
Reach out to your health care provider's billing office. You can usually find this number right on your medical bill. "Ask if you qualify for charity care or financial assistance programs," suggests Latham. "Just asking for this can often cut your debt in half. It is worth noting that all nonprofit hospitals are legally required to have these programs, and many for-profit hospitals have them also."
The billing department may decide on a reduced fee based on your income level, so have a recent tax return handy when you call. "Even if your income is too high to qualify for charity care," Latham adds, "you can still get a reduction of your bill if you can show the medical bills are causing you financial hardship."
If you want to arm yourself with additional information before you call, Latham recommends researching the average cost in your state of the specific medical procedure you received. "Websites like the Healthcare Cost and Utilization Project and the Healthcare Bluebook provide valuable data on the fair price of medical services throughout the United States," he says. "Use that information to negotiate a reduction if you are being overcharged."
If your bill isn't reduced, and you cannot afford the amount due, ask about the hospital's or clinic's appeals process. Then file an appeal.
Seek help from an advocacy group
"If the billing department can't lower a charge to a rate that's acceptable to your budget," Rice says, "reach out for help. Patient advocacy groups often have programs and financial assistance resources to help patients who are facing financial burdens."
Ask for a payment plan
Health care is expensive. So even if your medical bill is reduced—and especially if it isn't—you may still feel overwhelmed by what you owe. Your next step is to negotiate a payment plan. Ask for a payment plan directly with the provider.
"If you have medical bills you can't afford," Latham says, "don't put them on your credit card. You will always get lower interest rates when you negotiate directly with the health care provider."
In many cases, hospital and clinic bills are actually interest free. But the average credit card interest rate is 15% to 18%, depending on the type of offer, according to WalletHub. So if you plop a medical bill balance on your credit card, you will pay even more for it in the long run. But there's no reason to do that anyway.
Negotiate with the provider's billing department until they offer you a monthly payment in an amount you can afford without stretching your budget. Your other major bills like rent or a mortgage, your utilities, a car loan, and most other forms of debt should always be treated as higher priority than a medical bill, according to the National Consumer Law Center. Non-payments on your rent or a mortgage could result in an eviction or a foreclosure, whereas nonpayment on a medical bill won't result in an immediate negative consequence.
If your medical bill has already gone to collections, don't panic. You can negotiate with a creditor for a low-interest or interest-free payment plan with affordable monthly installments. Again, do not pay a creditor with a high-interest credit card just to get out from underneath the debt.
Instead, remain calm, and chip away at it bit by bit. You'll get there. As for getting your partner, teenager, or roommate to empty the cat box, that may not be as easy.