Don’t Pay that Total. How to Negotiate Your Medical Bills

Medical Records & Stethoscope

We have no problem haggling over the price of a car or home, so why not our medical bills?

"Medical bill professionals often negotiate bills down $10,000, $20,000 or $30,000,” says Christina LaMontagne, vice president of NerdWallet Health. "It’s possible for consumers, patients or caregivers to get the same results."

Medical debt is a main contributor to personal bankruptcy filings, so it’s in every consumer’s best interest to learn how to lower their costs.

Experts say patients need to know the fair market price for a procedure or treatment before making any decisions so they can plan accordingly. Information about the cost for different treatments based on the region or even city is readily available online. Consumers can also find the rate the government pays for medical procedures online, which LaMontagne says can often be 25% less than even what insurance companies’ pay.

Once patients determine the fair price, it’s time to dissect a bill to make sure there aren’t duplicate charges or errors in the billing. “There are a lot of mistake out there,” says LaMontagne.  “There are a lot of double charges in particular that don’t always get caught right away.”

Where a procedure was done plays a role in how much patients can negotiate. Under the Affordable Care Act, non-profit hospitals are required to offer patient assistance programs, says Mark Rukavina principal at Community Health Advisors.

According to Rukavina, tax exempt hospitals have to officially establish their financial assistance program by detailing eligibility requirements for discounts and possible savings. The programs also have to be made readily available to patients. Hospital can jeopardize their federal tax exempt status by not complying, which means people who are struggling with extraordinarily- high bills will be able to see some relief. Keep in mind that the discounts and relief will vary from one hospital to the next.

While for profit-hospitals aren’t required to offer assistance programs, Rukavina says many do, so don’t be afraid to ask. In some cases, a for-profit hospital will reduce the amount owed or create a payment plan to make a bill more manageable, he says.

There are also state-run assistance programs along with plans from medical device and drug companies that can provide some relief.

The first step to the negotiation process is for cash-strapped patients to call the health-care provider and be upfront and honest about their financial situation, says LaMontagne. After all, defaulting on the bill leads to credit score damage.

Some negotiation options include offering to pay a reduced rate in cash at the time of the treatment/procedure, asking for a payment plan or hiring an advocate to get the bill reduced.

There are non-profit and for-profit advocates available, so be sure to research professionals before making a selection. For-profit advocates typically earn a commission based on the amount that’s saved, according to LaMontagne.

While hospitals and other medical facilities will often have official policies when it comes to negotiating bills often that isn't the case if you can’t afford your bill from your private doctor.

Private doctors often don’t have official policies when it comes to negotiating bills, but that doesn’t mean patients shouldn’t try for a lower rate since the only option for the doctor would be to try and sell the claim to a collection agency for a lot less that a reduction.  

“There has been so many changes in the health insurance landscape and health technology landscape that there’s more opportunity than ever for consumers, patients and caregivers to leverage data available on the internet to get a sense of what prices ought to be and use that data to their advantage,” says LaMontagne. “It’s less around guess work.”