How to Negotiate Your Medical Bills Down to Manageable Size

Discounts and help are available if you know how to go about it

Doctor consulting patient in hospital
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It happens more often and to more people than you might think. You get slammed with a monster-size medical bill out of the blue, and you don't have the funds readily available to pay it.

Don't panic. Negotiate. You have options.

When Possible, Act in Advance

Ask for a discount ahead of the procedure or service if it's not an emergency. Speak candidly with your doctor or service provider about your circumstances. If you don't have insurance or your provider doesn't cover the procedure, say so. Your doctor needs to know if you're living on a fixed income, a low income, or if other factors will make it difficult for you to pay.

Many physicians and facilities have programs in place to help those who are financially strapped—but they won't necessarily tell you about them unless you ask. The important thing is not to be embarrassed and to candidly let people know that you need help as early on as possible. Some hospitals might require that you apply for Medicaid first, and these income limits can be strict.

Get it in writing if you're successful in negotiating a discount. You might need this confirmation later. In fact, you might want to make your pitch in writing as well so you have a record of it, or backup your conversation with a written communication summarizing what you spoke about and any terms you reached.

Make sure you understand what's included in the price you've been quoted. Does it cover anesthesia or is that extra? A discount on the surgery might not do you much good if anesthesia isn't covered and that cost alone is going to empty your bank account.

Offer Cash

Ask your doctor or the billing manager if they'd be willing to give you a discount for paying in cash if your initial request for a discount based on hardship is turned down. Point out that your cash payment will save the office credit card fees and staff time in processing paperwork. Instant cash flow is hard to say no to, especially if you offer to pay at the time of service.

Of course, you have to have the cash available to pull this off. Can a family member or friend help out if you don't?

After Treatment: Check the Bill for Errors

This can be tricky because medical bills have their own unique language, but you can determine whether your bill is accurate if you can decipher this language.

Virtually all procedures are coded to facilitate collections from insurance companies. You can often track down online the meaning of the medical codes that appear on your bills. Now you can tell whether you're being billed for treatment you actually received. Some errors are surprisingly commonplace.

Codes might be mismatched—they don't line up with your diagnosis. Be warned: You insurer, if you have one, will most likely decline to pay any portion of this claim. Upcoding involves a bill for treatment that might be similar to what you received, but it's not the treatment you underwent and it likely costs more.

Other errors can include numerous billings for the same procedure, known as duplicate billing, and unbundling, when services that should have been billed under one umbrella are broken out, often adding up to more.

Call your doctor, the hospital, or your insurance provider if you find discrepancies. Question the charges. Ask for a new, accurate bill.

Negotiate for Insurance Rates

Look up the fair market price for the care you received. This is the amount that providers regularly accept from insurance companies as payment in full, and it's the amount you should aim for in your negotiations. Uninsured patients are often charged higher rates. You can find this information in the ​Healthcare Bluebook.

Contact the billing department and use the same tactics described in steps 1 and 2 to negotiate a lower payment after you have this information. Politely ask to speak to a supervisor if the individual you're speaking with summarily turns down your request. Keep moving up the food chain until you reach someone who's willing to help you, or until you reach the highest authority.

Negotiate Payment Terms

You will occasionally come across a service provider that just won't budge on price, but don't give up and whip out your credit card just yet.

Work to establish a payment plan that meets your needs instead. Tell the billing representative how much you can pay and when you can pay it. If he asks for larger payments—and he probably will—explain that you simply can't afford to do more.

In all likelihood, he'll accept what he can get rather than not get paid at all, but his back will have to be up against the wall first. Be crystal clear about your ability to make payments. The "bankruptcy" word is almost guaranteed to get a representative's attention. If you declare Chapter 7 bankruptcy, the provider isn't going to receive any payment at all.

The fact is that if you even pay in dribs and drabs over an extended period of months because that's all you can afford, the provider is almost certainly not going to turn you over to collections. It will accept your money each month and send you a new bill the next month...and on and on, unless and until you miss a payment.

Don't offer or agree to pay more than you can afford under any circumstances. Falling behind in your payments will destroy any future negotiating power you might have.

Get Outside Help

If all else fails, consider reaching out for help. There are numerous health care and medical billing advocates out there, such as the Patient Advocate Foundation. The downside is that many of them cost money, too. Still, they'll go to bat for you if you don't have the stomach for all this or if you're just not getting anywhere on your own, and some offer sliding scale fees based on your income.

Make Good on Your Promise

If you agreed to pay at the time of service, do it. If you agreed to send in regular monthly payments, get those payments in on time each and every month. Failing to do what you promised could cause the provider to rescind any discount that was extended to you, and it could land you in the collections department.

Things to Keep in Mind

Remember, insurance companies negotiate with health care providers all the time. You can, too. No one will think you're stingy for doing so.

Call the billing department right away when you get a bill that you can't afford to pay. It's harder to negotiate a bill after it becomes delinquent.

Stay polite and maintain your composure. No one wants to help someone who's rude.

Doctor fees and hospital bills aren't the only bills you can negotiate. You can also negotiate your dental work and lab fees.