How to negotiate your medical bills

When negotiating medical bills, make sure to do your research, understand available options and be polite.

  • By Geoff Williams,
  • U.S. News & World Report
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If you've ever had an insanely high medical bill arrive in the mail, you've probably contemplated your options: Pay the bill and dine on ramen noodles for the next few years? Take out a loan? Ignore the bill and risk it going to collections? There is a better alternative: Learn how to negotiate your medical bills.

That is, bargain with hospital administrators and try to convince them to let you pay less. Here are some steps and strategies:

  • Study the bill.
  • Do your research.
  • Pick up the phone.
  • Ask open-ended questions.
  • Discuss your options.
  • Ask for medical forgiveness if applicable.
  • Consider tapping a professional negotiator.

Study the bill

We have a tendency to assume that if a bill says we owe money, we need to pay that amount. But many hospital bills have a lot of moving parts on them – that is, a lot of charges for services, supplies and procedures – and administrators can make mistakes.

Amanda Grossman, a resident of El Paso, Texas who a personal finance blog, FrugalConfessions.com, says she has successfully negotiated down two bills in recent years during and after a pregnancy.

"We received a $200 copay charge for going through the hospital's emergency room, when in fact we never had been in their emergency room," Grossman says. "I called the hospital's billing department, and they began an audit of the situation. They found that we were right – we had never been in their emergency room."

Her insurance company had been billed $4,308, but after Grossman got involved, the new number was $3,366 – still a small fortune, but better.

Grossman was also billed for a checkup that should have been completely paid for by her new insurance company. Grossman's pediatrician, however, expensed the visit to her old insurance company, and Grossman wound up receiving a bill for $1,097.

"It took seven months to fight this charge," Grossman says. "In the end, I had to contact the patient liaison officer for the pediatrician's office and write a dispute letter with all the complicated information. And you know what? Within six days of writing and submitting that letter, I got a call with an apology, and the debt was wiped from our account."

Do your research

When talking to a hospital administrator, it's a good idea to know what the price is of, say, a colonoscopy or an emergency room visit or whatever operation you or a family member has had. Fortunately, there are some websites that can give you an idea of how much various health care procedures cost, says Joseph DiBella, managing director at Conner Strong & Buckelew, an insurance brokerage, employee benefits and risk management consulting firm in Camden, New Jersey.

"Some easy sites to use include Healthcare Bluebook or FAIR Health Consumer. These sites allow patients to look up what procedures and services should cost so they can better negotiate," DiBella says.

Pick up the phone

Make sure that you have your bill in front of you – as well as your insurance card and any other information that you think you might need. Be polite, and keep your cool. Whomever you're about to talk to didn't come up with this price.

You should also take notes during the call about what you were told. Note the time and day of the conversation – and be sure to get the name of the person you are talking to in case you need that information later.

Ask open-ended questions

When you call, be sure to ask questions about the prices, says Alexandra Carter, director of the Mediation Clinic at Columbia Law School in New York City. She is also the author of "Ask for More: 10 Questions to Negotiate Anything."

"People often assume that medical bills aren't negotiable when they really are," Carter says. "One effective way to negotiate huge bills is to ask open questions that force the provider to tell you what waivers, discounts or relief plans are available. For example: What discounts do you have for financial hardship? Which of these fees can be waived? I know many hospitals have charity relief plans – can you tell me about yours?"

Discuss your options

Once you make it clear that you aren't rolling in dough, ask about your alternatives to paying in full. You may have an idea for paying off the bill, but there may be other options you haven't considered.

For instance, Carter says that if you think you can pay faster if fees were waived, that might help incentivize an administrator to cut you any breaks that they can.

And DiBella suggests asking the provider to charge you what Medicare would pay them for the service.

"The Medicare fee schedule is fair and usually far less than what providers charge patients or commercial insurance companies," DiBella says.

Keep in mind that most hospitals and many doctors' practices will work with patients to set up monthly installment plans, without interest, in which you pay what you can until the bill is paid off.

That's the route that Bunny Dachs, owner of Bunny's Home Care, a home health care service in Baltimore, encourages over, say, borrowing money to pay for your health care. "Getting into another loan while you are still settling a current bill will not help you at all," she says.

Ask for medical forgiveness if applicable

According to Dachs, medical forgiveness is "the term used if you are so broke that there will be no chance to settle the medical bill. If you have a verifiable hardship, like a disability which prevents you from working, you may be able to seek medical bill forgiveness."

Before you think, "Yes, medical forgiveness sounds good to me," Dachs says your provider will want to see proof, in the form of tax returns and written documentation, that you can't pay for your medical bills.

"You can also apply to nonprofit organizations like the PAN Foundation and CancerCare for help with your medical bills," Dachs says.

Consider tapping a professional negotiator

There are medical bill negotiator companies, like Medgotiate and CoPatient, that will try to get medical bills lowered in exchange for a portion of the savings, often around 20% to 30% of the money you no longer have to pay. And if you don't get any savings, they don't get paid. It may make sense to use them if you're looking at a raft of medical bills that you believe threaten your financial security.

Granted, you could negotiate your medical bills on your own and theoretically save more, but the idea behind these companies is that just as most people don't try to sell their house on their own, a medical bill negotiatior company may be able to negotiate more deftly than you would be able to on your own. Obviously, if you encounter a company that wants to be paid upfront, it probably isn't legit.

You might also consider reaching out to a patient advocacy nonprofit like the Patient Advocate Foundation, a national organization that can help patients with complex financial health care and insurance issues.

What not to do

While you can ignore the bill, anyone and everyone will tell you that's a terrible idea. Your credit score will plunge, and you may still later find yourself negotiating with debt collectors. So you might as well get ahead of this now.

But negotiating your medical bills could help a lot. "Don't be afraid to ask," DiBella says. "Many providers are willing to negotiate price. So ask. Remember the old saying, 'If you don't ask, you don't get.'"

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