How to Negotiate Medical Bills: 8 Important Steps
Key takeaways:
By negotiating your medical bills, you may be able to reduce the amount you pay or have more time to pay before the debt goes to collections.
Doing research and using negotiation strategies may improve your chances of paying less for medical services.
Negotiating your medical bills may save you from having your credit negatively impacted by unpaid debt.
An unexpected trip to a provider’s office or the hospital can result in a bill you can’t afford to pay. If you’re facing difficulties paying off medical debt, negotiation may be your best option.
Whether or not you have health insurance, the amount listed on a medical bill isn’t always how much you’ll end up paying. But successfully negotiating medical debt requires you to do some homework. Below, we outline eight steps you can take to reduce the bottom line of your bill.
1. Review the bill
No one is perfect — not even your healthcare provider. Your provider’s billing department could have charged you for a test or service you didn’t receive. So look over the bill carefully to make sure every item or service you’re being charged for is something you received.
For example, maybe your doctor wanted you to have a urinalysis, but you weren’t able to provide a sample. Still, the exam notes report you had a urinalysis and this information was sent to the billing department. In that case, you’re being charged for a test you didn’t receive, which is the basis for a deletion of the charge on your bill.
2. Review your coverage
If you have health insurance, make sure you know what your plan covers and your cost-sharing responsibility for the year. Your deductible may have reset to a higher amount at the beginning of the year. Your copays and coinsurance may be different than in previous years. And your benefits may have changed.
Your yearly explanation of benefits (EOB) details what your insurer will pay for your care and the out-of-pocket costs you are responsible for. With this knowledge, you can make sure your healthcare provider’s office has properly applied your insurance benefits to a bill.
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There can be reasons to delay paying until you receive final, accurate charges. Sometimes, insurance companies will still be processing a claim when a provider sends you a bill. This is something you can let your provider know, in addition to considering holding off on making any payments until you receive a final bill.
Another reason why your health plan may not have paid its share is when a claim is disputed or filed incorrectly. Providers bill your insurance using medical billing codes for different services. If a provider enters the wrong code, your claim could be denied. Often, this requires the provider to resubmit with a different code for the claim to be accepted.
And keep in mind that the No Surprises Act protects you from being charged extra for emergency care from an out-of-network provider, among other protections.
3. Comparison shop
It’s also important to note that you have the power to influence the amount you are charged before you receive a hospital bill. Before you receive a service, you should ask about the cost of your care upfront. If you don’t have insurance or choose to self-pay, you can request a good faith estimate, which details expected charges for healthcare services. If your bill turns out to be more than $400 above the estimate, you can dispute the charges.
You also can be proactive by researching the cost of your care in advance, using hospital price lists. Hospital price transparency rules make it easier for you to compare prices for care. Since 2021, hospitals have been required to publish their standard charges for at least 300 services that can be scheduled. You can also see costs for certain outpatient services with Medicare’s procedure price lookup tool.
You should be able to find a hospital’s list of standard charges on its website. If it’s not easily accessible, call and ask if the price of the procedure you are considering is published and where you can find the cost in writing. Knowing this information may help you determine if you’ve been overcharged for a service or help you save on a service in the future.
4. Speak up
Now, you’re ready to start talking about reducing your medical debt. To begin negotiating a medical bill, reach out to the billing department listed on the bill. And keep reading to find out how to interact with the person you encounter on the phone or in person.
5. Be polite, not pushy
Whether you’re outlining a billing error or asking for financial assistance, keep your cool. You’re more likely to make progress if you’re polite and level-headed. Being angry or aggressive is unlikely to yield favorable results.
There’s research to back this approach up. Researchers from the University of Southern California and Gifu University in Japan found that polite negotiating ends in a more equitable agreement.
6. Ask for help
Don’t be afraid to ask if you qualify for discounts, payment plans, or financial assistance programs offered by a hospital or provider. You could be eligible for a variety of reasons, including if:
You’re older.
You don’t have health insurance.
You have a low income.
You qualify for indigent care or charity care.
You qualify for debt forgiveness.
7. Be honest
When you’re negotiating a medical bill, explain your situation to the billing representative. Let them know the reason you’re unable to pay the full amount. Often, medical bills arise from an unexpected health crisis, and it’s helpful for people to know when that’s the case.
Researchers from the University of California, Berkeley found that when a negotiator talks about their plight and the emotional impact it's having on them, the other person is more likely to feel sympathy and reach a resolution favorable to the negotiator.
8. Request a payment plan
Even if you can’t reduce the amount of medical debt you owe, you may be able to pay less in the long run if you’re able to negotiate a payment arrangement and avoid incurring late fees or interest charges. This also prevents the unpaid debt from being turned over to collections, which can affect your credit score.
Requesting a payment plan may help you reach an agreement that works for your budget. For example, you may be able to turn a $3,000 debt into $125 monthly bills for 2 years, without interest, fees, or the balance going to collections.
What you should avoid when negotiating medical bills
No matter the size of the bill, there are certain actions that can make your situation worse. Here are some things that you should not do when negotiating medical bills:
Don’t ignore the bill. If you do nothing, your medical bill could grow because of interest and fees. And, eventually, the debt could end up in collections and ding your credit score.
Don’t start negotiations uninformed. Always do your research. Know what your insurance will cover and the published procedure costs in your area. That way, you will be able to make a case for a discount.
Don’t negotiate with a bad attitude. Before reaching out to a billing department, set the intention that you will be able to reach a favorable resolution. Express appreciation for the opportunity to discuss your medical bill. Stay calm, be polite, and don’t yell.
Will your credit be affected if you try to negotiate medical bills?
Negotiating a medical bill can reduce what you owe and prevent the debt from going to collections. Those may be the strongest reasons to give negotiation a try.
If you agree to a payment plan, it’s important for you to follow through with that obligation. If you can pay the entire bill or bring what you owe to below $500, this will keep the debt from appearing on your credit report. And, if you can pay the debt within 1 year, this will also prevent the negative information from showing up on your credit report.
The bottom line
Negotiating your medical bills is an effective way to take charge of your medical debt. Reaching out to billing departments may help you reduce the amount you are responsible for paying. You also may be able to get more time to pay off the debt and prevent it from going to collections.
Taking action may also allow you to benefit from discounts, payment plans, or financial assistance programs. It’s also important to note that there are things you can do before you receive a medical bill, including asking for a good faith estimate and finding out costs upfront through hospital price transparency.
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References
CMS.gov. (2022). Hospital price transparency.
CMS.gov. (2023). How to get the most out of hospital price transparency.
Medicare.gov. (n.d.). Procedure price lookup for outpatient services.
Shirako, A., et al. (2015). Is there a place for sympathy in negotiation? Finding strength in weakness. Organizational Behavior and Human Decision Processes.
Terada, K., et al. (2021). Effect of politeness strategies in dialogue on negotiation outcomes. Proceedings of the 21st ACM International Conference on Intelligent Virtual Agents.
This article is solely for informational purposes. This article is not professional advice concerning insurance, financial, accounting, tax, or legal matters. All content herein is provided “as is” without any representations or warranties, express or implied. Always consult an appropriate professional when you have specific questions about any insurance, financial, or legal matter.
