Prevent Medical Debt: How to Negotiate Your Medical Bills

by Nick Versaw Updated November 22nd, 2021

How to negotiate medical bills: injured woman working from home

Many Americans struggle with medical bills. According to the Bureau of Labor Statistics, the average American spent $5,177 on health care costs in 2020. A summer 2021 report by the New York Times stated that Americans have a collected medical care debt of nearly $81 billion. 

Medical bills that are older than 180 days are often passed to collection agencies, which can potentially damage your credit report. In addition, interest rates on past-due medical care balances can also balloon the initial costs of care to dramatic heights. 

If you’re wondering how to negotiate medical bills, either before or after a specific treatment or surgery, there are a variety of proactive strategies you can take. 

Depending on when and who you negotiate your medical costs with, you can potentially reduce the total amount you owe, set up a payment plan to pay the debt off in time, or receive financial assistance

Read on to learn some tips and strategies you can use to get medical care at a fair price and keep debt collectors away.

The Smart Way to Use Health Insurance

Patients who have health insurance have the most options to negotiate their medical bills. Many people with health insurance aren’t aware that they can “comparison shop” for medical treatments and surgeries just like they would any other major purchase. Here are some quick ways you can utilize health insurance to reduce medical costs:

  • Stay in network: Using doctors and treatment providers that are a part of your insurance company‘s network can be far cheaper than those outside of their network. Review your explanation of benefits carefully to know your deductible and copay for treatments before scheduling them. 
  • Do your research: Before undergoing treatment or surgery, utilize tools like Compare.com’s procedure cost comparison tool to see how costs differ between facilities and to find the most affordable care around your city.
  • Know the cost up front: Many people agree to treatment and procedures without a true understanding of the price they will pay. New health transparency laws now require hospitals and insurance companies to spell out the exact costs of treatments to patients. Costs for services should be available on hospital and medical treatment facility websites, but unfortunately it’s often still difficult to find prices. You can instead find the cost of a medical procedure at a specific hospital by using the Compare.com procedure cost comparison tool. Just enter your ZIP code and immediately see exact costs for any procedure before you schedule an appointment.
  • Explore state programs: Many states offer programs to reduce the cost of medical services for low-income or economically struggling patients. 

How to Negotiate Medical Bills Before Treatment

One of the best strategies to negotiate medical bills is to agree on a price of a treatment or surgery before it happens. Many patients make the mistake of hastily agreeing to care, only to worry about the hospital bills later. 

By negotiating an affordable rate for treatment or medical services before they happen, you can save yourself from high medical costs and interest rates.

Unless you have to seek treatment in an emergency room for an accident or injury, the cost of many medical procedures can often be reduced by negotiating with your health care provider prior to undergoing treatment:

  • Discuss the procedure or service you’ll be receiving with your doctor.
  • Make sure your plan of care is focused only on services that are medically necessary. 
  • Ask that any doctors that will be giving you care be in-network. 
  • Many billing departments will allow you to make a payment arrangement prior to care, so request an itemized estimate beforehand to see everything you’re paying for. 

Uninsured patients are often charged more for medical services than insured patients. Also, hospitals can charge you whatever they want for a procedure, so costs could be inflated.

Patients can utilize tools like the Compare.com medical procedure cost comparison tool to find the fair market cost for medical services. When you enter negotiations with hospital billing departments, use these costs as a starting point to advocate for yourself. Even the cost of routine medical services and procedures, such as MRIs and CT scans, can vary drastically from hospital to hospital. What might cost $5,000 at one hospital might cost just $500 at the hospital around the corner. Use this knowledge to help make your case for getting your bill lowered. 

How to Negotiate Medical Bills After Treatment

How to negotiate medical bills: doctor putting a bandage on a patient's wrist

If you’re struggling to pay medical bills long after undergoing treatment, there are a variety of strategies you can use to reduce costs: 

  • Hospital financial relief programs: Many hospitals and medical treatment centers offer discounts to economically struggling patients and financial relief programs for those who can’t pay their bill. Ask your treatment facility’s billing department if they offer financial assistance, sometimes referred to as “bridge assistance.”​​​​
  • Government payment assistance: Many patients who are not on Medicaid can still retroactively qualify for financial assistance through the federal government. In fact, medical bills can accumulate for three months before you apply for Medicaid assistance for help. 
  • Negotiate a lower rate with your insurance: Try to negotiate a lower payment with your insurance company or health care provider based on your income level. Have a recent tax return on hand when you begin negotiations. 
  • Advocacy programs: If your medical care provider or private insurance company refuses to help you negotiate your medical bills down to a rate you can afford, a consumer advocacy program like the Patient Advocate Foundation may be able to help. 

Set Up a Payment Plan 

If you didn’t do this before treatment, now’s the time to contact your hospital’s billing department and ask for an itemized bill. This way, you’ll understand the full spectrum of your treatment and what you’re being asked to pay for. 

Setting up installments or a series of monthly payments before you undergo treatment is an effective way to prevent your medical bills from going into collection. This can be done by contacting the billing department at your healthcare provider. 

In addition, you can also avoid the accumulation of interest on medical costs by paying in a lump sum with savings or income tax returns. Many collection agencies allow patients to pay off their medical debts at lump sums that are far lower than the amount they initially owed. 

If your credit score is in decent shape, consider paying off medical bills with a credit card that may offer a better long-term interest rate than a collection agency.

Moving Forward

Patient filling out forms

Keep a careful eye on estimates and bills to avoid billing errors. Sneaky billing errors can burden your account with interest and penalties that can cause you to pay more than you actually owe for services. 

If you’re uninsured, explore state and federal healthcare insurance programs that can offer lower rates than private insurers. The federal government also offers several medical cost-sharing and cost-reducing strategies at healthcare.gov

People with low income or limited economic resources should also explore Medicaid programs which can help them pay for basic home care and medical equipment related to treatments and surgeries. Patients who are 65 and older should also explore fee-for-service health plans through Medicare.

If you are an armed services veteran, a charity care provider may be able to help you to reduce or eliminate medical costs related to your time in active duty. 

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