Medical Bill Negotiation Strategies

It can be difficult to recover from a lengthy or even short illness. But when you face a hefty medical bill, the debt that follows can hit your finances hard as well. Unfortunately, many Americans are experiencing medical debt.

According to Kaplan Collection Agency, 36.3 percent of U.S. households carry some sort of medical debt, with an estimated $194 billion to $303 billion currently in collections.

But there are ways to minimize or at least reduce your debt. Many people don’t realize they can negotiate a medical bill. Knowing how can reduce your financial obligation.

Understand Medical Bills and EOBs

The first step in negotiating a bill is to establish if it is a medical bill or an insurance notice. It’s important to examine what is sent to you to ensure it’s actually from a healthcare provider, hospital, or laboratory.

Typically, you’ll receive an explanation of benefits (EOB) letter from your insurance company. This is not a bill. It is a notice explaining what the insurance will pay and what you will be responsible for.

Check Medical Bills for Errors

Once you have received an official bill, check it for errors. According to AltuMed, up to 80 percent of healthcare bills have mistakes on them that in some cases lead to overcharging.

According to Experian, you should request an itemized bill from your healthcare provider. This includes the hospital and lab charges. The bill should show you a line-by-line accounting of what you are being charged. It will have the dollar amounts and associated codes.

To investigate what the codes mean, you can use standard search engines like Google. Type the code, such as the ICD-10 code for pneumonia, into the search engine to see the definitions.

There are also free online directories. One is the AMA CPT Code Search, which can help you verify what a specific billing entry means.

If a code is missing or unclear, contact the provider or insurance company for a plain-language explanation.

Use these codes to review the bill for errors. Check for services or medication you didn’t receive. Also, check for duplicate charges.

Do your research so that you know whether you are being charged fair market price for the services that you received. You can look up healthcare costs on Healthcare Bluebook and Fair Health.

Set Up a Payment Plan or Negotiate One Lump Sum

According to Community Health Advocates, if you can’t afford to pay your bill, you can explain to your provider or the billing representative that you need to set up a payment plan. Tell them how much you can afford and how frequently you can pay it. If they push back, explain that you want to pay the bill but are unable to do more than you have requested.

Once you have established a payment plan, stick to it.

Another option is to offer a lump sum payment up front in exchange for a discount. For example, if you owe $2,000, you could ask if they will let you pay a lower amount such as $1,000 to settle the full debt.

Ask for any agreement in writing.

Negotiating With a Debt Collector

If a collection agency contacts you, inquire if they are collecting a debt owed to them or to a third party. In other words, have they purchased the debt?

This information will help you to know how to negotiate. Request verification of the debt. This will force the debt collector to confirm that you are the right person to collect from. It also requires them to provide proof that you owe the debt. If you’re still not sure, ask for more proof.

Sometimes a debt collector will refuse to verify the debt or negotiate. If this happens, according to the Community Health Advocate, you should write them a letter. The letter should say:

Send the letter by certified mail and ensure that you keep a copy. If they continue to contact you, consult an attorney or seek legal assistance from a group that supports fair collection practices.

If you do come to an agreement with a debt collector, ensure it’s in writing.

Financial Aid Is Available

According to Community Health Advocates, hospitals must offer financial assistance to help people pay hospital bills. Ask for a financial aid application or write a letter to healthcare providers, labs, or hospitals requesting financial relief. The letter should have the account number, the amount owed, and date of service. Look at your itemized bill for this information.

Explain that you are asking for financial assistance. State your financial situation and that you are unable to pay. You should include your employment status and current financial obligations.

Seek a Professional Negotiator

You may not feel comfortable negotiating. But fortunately, there are professional companies and individuals that will review your bills and negotiate for you.

But be aware that there may be a one-time flat fee. Some companies charge a fee based on your savings or combine both methods.

Your employer may also offer medical bill negotiation benefits.

Know Your Medical Bill Payment Options

Know your options before paying a medical bill. Most people don’t realize they don’t always have to pay the full amount.

According to Emry Health, hospitals often offer substantial discounts through financial assistance programs.

If all else fails, a professional bill negotiator may help.

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