How to Negotiate Your Medical Bills

According to a study conducted by The American Journal of Medicine, around 60% of personal bankruptcies are caused by overwhelming medical bills. The fact is, if you’ve been sick or severely injured, medical bills can add up fast. Even if you have health insurance, there is a good chance that you will be left with sizable medical bills.

The good news is that patients can actually negotiate their medical bills, but many never do. The amount that you are originally billed is not always the amount that you absolutely must pay. While negotiating won’t work in every case, the majority of patients can negotiate their bill. Here are six tips to help you negotiate your next medical bill.

1. Be proactive.

If you know that funds are tight at the moment, let your doctor or healthcare provider know before any testing or procedure has been performed. Ask the physician to quote the price of a procedure, then ask if there is anything he or she can do to lower the cost. If you’ve recently been laid off or you don’t have health insurance, make sure that your doctor is aware of your situation. Believe it or not, there is a lot of flexibility in pricing.

If your doctor won’t lower the price of a procedure, ask if you could receive a discount for paying in cash. This is where having a health savings account can come in handy. If the doctor won’t offer a cash discount mention you may switch to another doctor that does. If you don’t have health insurance, always make sure to shop around for the lowest prices before undergoing any procedure if you can.

2. If you’ve already received the bill, figure out the fair market price of the procedures you received.

The fair market price is the price that insurance companies are asked to pay for different medical procedures. This is usually the same as the Medicare rate, as Medicare prices are the standard that many insurance companies and healthcare providers go by.

To find these prices, reference the Healthcare Blue Book, which lists the fair market price of most procedures. Once you know how much an insurance company would be expected to pay, you’ll have an idea of how much room you have to negotiate.

3. Contact the billing department and ask to speak with someone who can help you with your bill.

Contact the billing department and politely ask if there is anything that can be done to reduce your bill. Make sure to speak with a person who actually does the billing and not a receptionist, since he or she will be unable to make any changes to your bill. Explain that you simply cannot afford the bill, due to your low income, a period of unemployment, or another financially difficult situation. Be as calm and polite as possible throughout the entire conversation, as this will get you the best results. Again, it’s one of those situations where you won’t know unless you try and the worst that can happen is they aren’t able to do anything regarding your bill.

4. Carefully go through your bill and ask which, if any, charges can be billed differently.

Sometimes medical bills can be reduced by billing procedures a bit differently. Medical billing and coding is a tedious, detail oriented job. Each procedure has a very specific code which dictates its price. Your bill may be able to be reduced if the billing professional is willing to change the billing codes to less expensive, but comparable procedures.

I had a situation like this a few years ago with some eye exams. I had to go see a specialist for some testing on one of my eyes and when the bill came it looked like I owed over a thousand dollars because insurance didn’t cover these specific tests. So I went back to the doctor and inquired about how these couldn’t be covered and they went back to the insurance company and billed the tests as medically necessary, which meant the health insurance kicked in and covered them. Had I not asked I may have just thoughtlessly paid the bill even though I didn’t need to.

5. Request a new bill that lists the changes in price.

If your bill has been reduced, ask that the updated bill is sent to you. It’s important to keep a copy of this bill just in case you are again asked to pay the original price. If you don’t have a copy of the new bill, you will have no proof that your bill was reduced. And if you’ve ever worked with insurance companies before, you know very well how information gets lost or comes up “missing.”

6. If all else fails, ask for a payment plan.

Sometimes there really is nothing that can be done to reduce the price of your bill. While this is unfortunate, it can and does happen on occasion. If, after negotiating to the best of your abilities you are still required to pay the full price, ask for a payment plan.

Let the billing professional know what you can realistically afford to pay and when you can make payments. Do not agree to terms that are above your means, even if you are pushed to do so. As long as you make the required payments, you will be able to keep your bill out of collections and on its way to getting fully paid.

Again, this is a strategy I’ve employed on a few occasions. Namely, the bills associated with the birth of our children. Even after insurance picked up most of the tab we were left with a few thousand dollars in co-insurance and deductibles. Rather than writing a big check I called the billing department and let them know I couldn’t pay in full. To my surprise they immediately granted me a interest free payment program. That’s right, no interest charged for making payments over time! Talk about leveraging your money.

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.