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The Art of Negotiating Medical Bills: Strategies to Reduce Your Debt

After a medical emergency or expensive procedure, the last thing you want to deal with is a surprise bill. Medical bills can feel confusing and intimidating, and the unexpected cost often leads to financial strain or debt, especially for people with limited budgets. 

Nearly 1 in 10 Americans reported owing medical debt in 2022, totaling an estimated $195 billion nationwide. In addition to financial repercussions, medical debt can lead to more serious health concerns: 32% of Medicare respondents delayed or avoided receiving care while paying off medical debt, according to a 2023 report.

Ignoring a medical bill can harm your credit and physical health, but receiving a bill does not mean you have to write a check immediately. Instead, research your rights and learn how to negotiate your bill strategically. 

Know Your Rights 

With the increasing burden of medical debt nationwide, the federal government enacted the No Surprises Act in January 2022. This act protects patients who receive out-of-network care without prior authorization. Unexpected bills commonly occur after someone has an accident or receives emergency care without the ability to shop around or find an in-network provider, but the No Surprises Act allows patients to appeal or dispute a burdensome bill in certain situations. 

If you receive an unexpected medical bill that you cannot afford, do not panic. You have the right to dispute your bill, and you might be able to lower the cost by talking to the provider, negotiating with a collections agency, or accessing financial aid. Individual states may also enforce patient protections, so research laws in your area. 

How to Negotiate Medical Bills

Negotiating a medical bill takes time, patience, and preparation. The steps below outline how to handle this process efficiently.

Understand Your Bill 

First, take time to understand exactly what you’ve been charged for. Start by confirming the basic information on the bill, including:

  • Your name and address
  • Which provider or facility sent the bill
  • Dates of services
  • How much your insurance was billed for and paid
  • How much you are asked to pay
  • Contact information for the billing department

Ask the provider for an itemized bill detailing each service and its cost, and ask for clarification on any confusing terms. In a fast-paced emergency situation, you may not have been aware of every service you received. Look for obvious mistakes, such as duplicate items or services that do not make sense for your diagnosis. 

Prepare for Negotiation 

Next, research the market rates for all services listed. Insurance companies negotiate lower rates with providers, and so can you. Use resources like Healthcare Bluebook and FAIR Health’s online search tool to identify services you may have been overcharged for. Keep track of any discrepancies.

Before reaching out to the provider, gather any relevant or supporting documents. In addition to your itemized bill, you may need:

  • Your insurance card
  • The account number listed on your bill
  • Information about your insurance policy
  • Record of what you have already paid
  • Explanation of benefits
  • Consent forms related to the services in question
  • Good faith estimates from the provider
  • Medical records and notes

Negotiation Strategies

The negotiation process can take a while, so be patient and maintain a friendly demeanor. It may take multiple calls; keep notes and write down the name of each person you talk to. 

Start by explaining that you cannot afford your medical bill as-is. Some hospitals offer financial assistance, but they do not always advertise it. Nonprofit hospitals must provide free or low-cost care to patients within a certain income bracket, but their terms vary.

If you do not qualify for financial assistance, ask the provider to lower your bill. While not guaranteed, some providers are willing to meet you partway. In some cases, they could allow you to pay the insurance rate instead of the full charge. Discuss any discrepancies and your market rate research. 

If you have savings or can afford to pay part of your bill, ask if the billing department has a “settlement amount.” They might accept a much lower rate if you pay upfront. Otherwise, ask about a payment plan. This can help you split up the bill with low or no interest.

Negotiating with Collections Agencies

Your medical bill may be sent to collections if you wait too long to pay. Typically, hospitals wait 60-120 days before selling the debt to a collections agency. While it’s best to take care of the bill before this happens, you can still negotiate after the collections agency contacts you.

First, ask the agency to prove that you owe the debt. They must confirm how much and who you should pay. If you cannot afford the full amount, propose a payment plan. You can also ask if they will settle for partial repayment. In many cases, collections agencies purchase debt for pennies on the dollar, and they would prefer to get some money rather than none.

When to Seek Professional Help

Deciphering medical codes, navigating negotiations, and researching your rights would be stressful in any circumstance, but after an accident or medical emergency, this process can be overwhelming. A medical billing advocate can help you understand the charges on your bill and advocate on your behalf. If any of the following situations apply, you may want to reach out to a professional:

  • You have multiple or continuous medical bills due to a chronic condition
  • You are considering bankruptcy due to medical debt
  • You have no insurance 
  • Your health prohibits you from negotiating 
  • You have trouble dealing with your health insurance company

Your hospital may employ a patient advocate who can help you navigate the process. You can also find help through the Patient Advocate Foundation. Be careful to avoid scammers; find your advocate through reliable channels. 

All in All

Receiving an unexpected medical bill can feel daunting, but remember that you have resources to help you through the process. Use the Center for Medicare and Medicaid Services’ (CMS) No Surprises Act toolkit to understand your medical bill and establish your rights. You can also contact the No Surprises help desk at 1-800-985-3059.

Take small steps to resolve the situation as soon as you receive the bill. If you wait too long, it may be sold to collections and could negatively affect your credit score. Instead, reach out to a trusted friend, family member, medical billing advocate, or government resource to lower your bill or establish a reasonable payment plan.

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