How to Negotiate Medical Bills

Getting a medical bill that’s higher than expected can be a stressful experience, but it happens to more people than you might think. In fact, an estimated 41 percent of Americans carry healthcare debt. As much as you might want to ignore that big bill, paying your healthcare bills is crucial. 

However, you don’t have to accept the price that you see. You have the freedom to challenge the amount, and potentially reduce it. In this blog, we’ll cover how to negotiate medical bills down to a lower overall price — a skill that could save you thousands of dollars in healthcare costs.

Can You Negotiate Medical Bills?

Don’t let the official-looking letterhead from a medical provider’s office intimidate you. Behind every doctor’s office or emergency facility are people, and those people are often open to negotiating. The short answer? Yes, you can negotiate medical bills. However, it’s not as simple as calling and demanding a lower price. You need to be armed with information and a plan.

Here are 7 ways you can negotiate your medical bill.

1. Start the Process Early

Negotiating medical bills takes time. Between speaking with your insurance company, your healthcare provider’s office, and your provider’s billing company (if they use a third-party service), the phone calls alone are enough to exhaust anyone. Starting early gives you a chance to pace out these conversations in a  more manageable way. It also lets you do your research and gather the information you need to make a compelling case.

2. Review Your Medical Bill

Before we dive into tips on how to negotiate a medical bill, let’s first make sure that you understand your bill. This will put you in the best position to dispute it. An estimated 80 percent of medical bills contain errors, so it’s good practice to closely review every medical bill you receive — even if the amount owed looks correct. 

Below are the basics of reviewing your bill:

• Get an itemized bill: This will show you the exact amount you were charged for each individual service, procedure, or medication. It can also eliminate the risk of two common billing errors: duplicate charges (what it sounds like) and “unbundling.” Unbundling is when a provider bills you separately for several services that were meant to be billed as a package, resulting in a higher bill.
• Confirm the medical codes: Your condition, as well as the services you receive, are often represented by medical codes. You can find these codes on the American Medical Association website. Cross-reference the site to ensure you were billed correctly. A common error involves misdiagnosis, in which the bill codes your condition as more severe than it is, resulting in higher charges.
• Look for out-of-network providers: Even if you received treatment from an in-network doctor or facility, sometimes your total services include an out-of-network provider, such as an anesthesiologist or diagnostic lab. If you see this on your bill, you might be able to ask your insurance company to cover it as if it were in-network.
• Check the legal compliance: The No Surprises Act was designed to protect consumers from being charged an amount significantly higher than was agreed upon. If your bill is more than $400 over the original estimate, you have the right to dispute it.

Once you know your way around a medical invoice, you’ll be able to negotiate a medical bill with proficiency.

3. Research Fair Prices

At the end of the day, doctors are service providers — and not all who offer the same service charge the same price. Price gouging happens in the medical industry, just like it does in any other. And you have a right to know if your medical provider is charging you fairly. 

Fortunately, there are tools and organizations that aim to provide transparency in medical pricing:

• Healthcare Bluebook allows you to see the fair price for a service or procedure in your area. 
• FAIR Health Consumer collects data on claims for 75 different health plans, insurance companies, and third-party administrators to determine the average cost of procedures and services.

If you’re paying out of pocket, you should also know that sometimes healthcare providers charge uninsured patients a higher cost than they do insured individuals. You can use the tools we referenced to see what a provider would charge an insurance company for the service you received. Then you can ask your provider’s billing department to honor that price.

4. Verify Your Insurance Coverage

When are medical bills negotiable? If your insurance company was supposed to cover your bill, you can negotiate to confirm that your insurance company pays its fair share. You can do this if you’re looking at a cost estimate, before you receive treatment, or even if you’re looking at a bill after you’ve received treatment. Log into your insurance portal and review your policy details, checking that the insurance company has:

• Paid the proper co-insurance percentage
• Charged you the appropriate co-pay
• Applied your deductible correctly

You can also reference your Explanation of Benefits (EOB) to go over what’s covered — and what’s not. If you believe your insurance company has made an error and not fulfilled its financial responsibility, call them to make your case. Use Insurance ‘N You’s digital wallet to store and organize important documents like your EOB, policy forms, and medical bills to keep everything in one easy-to-find place.

5. Decide Which Negotiating Strategy to Use

So now you’ve either confirmed your bill is correct or had your provider/insurance company correct errors. It’s time to discuss the specifics of how to negotiate lower medical bills. Here are a few different approaches you can take:

• Offer to pay upfront: Some medical providers agree to lower your bill if you agree to pay the full amount upfront — rather than over time
• Ask for a payment plan: You might qualify for a no-interest payment plan, which gives you the freedom to pay your bill in installments instead of all at once. This will not reduce your total cost, but it will break it down into manageable payments.
• Present your research on fair rates: If your healthcare provider charged a price that is disproportionately higher than what’s considered fair, present them with this information — they might be willing to reduce your bill.

The most important thing is to communicate with your healthcare provider’s office as soon as possible. As long as you communicate with them and try to work towards a solution, they likely won’t send your bill to collections.

6. Ask About Financial Assistance Programs

Depending on your income level, you might qualify for financial assistance. Many medical providers — particularly hospitals — have financial assistance programs. Even if they don’t have an in-house program, most providers have financial assistant experts in their billing department who can point you toward such programs. Just keep in mind that if you have Medicaid or Medicare, you’ll need to exhaust those benefits before qualifying for other financial assistance. These applications also take time and often require certain documents from you such as tax returns and income statements — one more reason to start the negotiations process early. 

7. Partner with a Medical Billing Advocate

Medical billing advocates are professionals who help their clients bring down medical bills. They review your bills for errors and negotiate with the provider or your insurance company on your behalf. They also help patients understand their rights and options. There are a number of resources that can help you find an advocate including:

• The hospital’s billing department: Some providers have patient advocates on staff.
• The Patient Advocate Foundation: This non-profit can pair you with an advocate who is trained in your state’s healthcare regulations.
• Your state’s Office of the Patient Advocate: Each state has one, and they can connect you with the right professional.
• National Association of Healthcare Advocacy (NAHA): This organization has a directory of advocates that helps you search for advocates in your state who specialize in your area of concern.

Keep in mind that not all patient advocates provide services for free. Some charge by the hour, or collect a percentage of the funds they help you recover. Make sure you understand your advocate’s billing structure (if any) before moving forward with them.

How to Negotiate a Hospital Bill

Hospital bills are typically much higher than bills for planned services. And, due to the nature of most hospital visits, you don’t usually have the luxury of getting an estimate in advance. When emergencies happen, you simply need to receive treatment right away. But, the resulting bill can almost be as stressful as the medical event itself. 

Luckily, you can also negotiate a hospital bill, using most of the same tactics we listed for regular bills. You simply won’t have the option to negotiate the cost before treatment — you’ll do this once your insurance has already paid your provider. So you will be retroactively disputing charges.

Additional Tips for Medical Bill Negotiation

By now you should have a good idea of the types of errors you’re looking for in an invoice, what your rights are, and how to negotiate down medical bills to a lower price. 

Here are a few more tips to keep in mind during the process:

• Get organized: Having your documents in front of you — like your erroneous bill (with highlighted errors), proof of unfair pricing, or your EOB — will help you communicate with your provider or insurer efficiently, and convincingly.
• Be kind: Even though high medical bills are frustrating, losing your patience with a representative from your provider’s office or insurance company rarely results in the desired outcome. 
• Ask about in-house financing: If the provider doesn’t offer an interest-free plan, and credit card interest rates are too high, ask about in-house financing. Some medical providers have their own in-house financing programs that offer lower interest rates than credit cards.

Negotiating medical bills with insurance companies or providers doesn’t have to feel intimidating. With a little preparation and persistence, you might be able to bring down the cost of your bill and save hundreds or thousands of dollars. 

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Finding a comprehensive health insurance plan is one of the best ways to manage medical costs, and reduce the risk of those surprise bills. At Insurance ‘N You, we’re all about you. We help you find plans and compare health insurance quotes that align with your health and financial goals. 

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