How to Negotiate Medical Bills
Dealing with medical bills can be stressful, especially when the charges are unexpectedly high. However, the “amount due” on a medical bill is not necessarily set in stone. Negotiating medical bills is a common practice, and many health care providers are open to discussions about reducing costs or setting up a manageable payment plan.
Whether you’re dealing with a large hospital bill or an unexpected charge from a doctor’s visit, these six steps can help you effectively negotiate your medical bills and potentially save you thousands of dollars.
Key Points
• Medical billing errors are common so be sure to ask for an itemized bill and check for any inaccuracies.
• Compare your bill to your EOB to ensure it lines up with your coverage and what the provider is allowed to bill after insurance.
• Many hospitals offer financial assistance programs to patients who are struggling with medical bills.
• You may be able to negotiate your bill just by explaining your situation and politely asking for a reduced amount.
• Other options for managing bills include setting up an interest-free payment plan and using employer health benefits.
1. Ask for an Itemized Bill
A good first step in negotiating a hospital bill you can’t afford, or any type of medical bill, is to ask for a complete breakdown of charges. An itemized bill will list every service, procedure, and medication you’re being charged for, providing full transparency. This can be particularly helpful if you’re looking to negotiate a medical bill after insurance. You can compare the itemized bill with your Explanation of Benefits (EOB) document and verify that the charges align with your coverage and what you’re responsible for paying yourself. Reviewing your bill can also identify any billing mistakes (more on that next).
2. Check for Billing Errors
Billing inaccuracies — from duplicate charges to incorrect billing codes — are surprisingly common in the medical industry and can be highly costly to consumers. When reviewing your itemized bill, you’ll want to keep an eye out for these common billing errors:
• Duplicate charges: Ensure you haven’t been billed multiple times for the same service or medication.
• Incorrect services: Verify that you’ve been billed only for treatments and procedures you actually received.
• Incorrect billing codes: Mistakes in medical coding can lead to inflated charges. Look over your bill (you may have to look up the CPT codes online) and ensure the charges accurately reflect your treatment.
• Unbundled charges: Sometimes a group of procedures that occurred together (and should be charged under a single code) get listed as separate services. Keep an eye out for any services that appear to have been “unbundled.”
If you spot errors, you’ll want to contact the billing department immediately to have them corrected. Be sure to document your conversations and keep copies of all correspondence for reference.
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3. Ask About Financial Assistance Programs
Many hospitals and health care providers offer financial assistance programs to help patients struggling to pay their bills, but they may not make you aware of them unless you ask. These programs are often based on income and can provide significant discounts or even forgive a portion of the debt entirely.
When speaking to the billing department, ask if you might qualify for any of the following:
• Charity care programs: Designed for low-income patients, these programs can reduce or eliminate medical debt.
• Sliding scale discounts: Some providers adjust fees based on your income level.
• Hardship waivers: If you’ve experienced financial difficulty due to a job loss or medical emergency, you may qualify for reduced bills.
If assistance is available, you’ll likely need to apply. This typically involves submitting information about your budget, the assets you own, recent tax returns, and proof of income (e.g., pay stubs).
4. Ask for a Lower Bill
Sometimes, all it takes to reduce your medical bill is to ask for a discount. Many health care providers have flexibility in their billing and are willing to negotiate with patients, especially if you’re uninsured or paying out of pocket.
When negotiating your medical bill, keep these tips in mind:
• Be calm and polite: Getting angry or becoming emotional generally won’t work in your favor. For your best chance of success, you’ll want to explain your financial situation in a clear and calm way, then politely (but assertively) ask if the provider can offer a discount.
• Offer to pay right away: Many providers are willing to offer a reduced price — or “settlement amount” — if you agree to pay immediately, as it saves them the hassle of pursuing collections. You might ask if they can offer a self-pay discount if you pay all or part of the bill that day. This strategy could result in as much as 30% to 50% off.
• Compare market rates: Research what other providers charge for similar services in your area. Websites like FAIR Health Consumer and Healthcare Bluebook can help you determine if a provider overcharged you for a service.
If the first person you speak with isn’t helpful, ask to speak to a supervisor or someone in the billing department who is authorized to make adjustments.
5. Negotiate a Payment Plan
Even providers who won’t budge on price are often willing to offer payment plans, allowing you to pay off your debt in smaller, more affordable installments. Here are some tips for how to approach setting up a payment plan:
• Determine your budget: Before you ask about payment plans, it’s a good idea to look at your monthly cash flow and calculate how much you can realistically afford to pay toward your medical bill each month.
• Propose a plan: A good negotiating tactic is to start by offering a lower monthly payment amount than you can afford, as this leaves room for negotiation.
• Request interest-free terms: Many providers offer payment plans without added interest, making this option more affordable than making monthly payments on your credit card.
It’s a good idea to get the terms of your payment plan in writing to avoid confusion later. Sticking to the agreed schedule can also help you avoid additional fees or collection efforts.
Recommended: Can Medical Bills Go on Your Credit Report?
Employer Resources
Many employers offer benefits that can help reduce medical costs, such as health-related savings accounts (HSAs), health reimbursement arrangements (HRAs), and stipends. These resources can significantly reduce the financial strain of medical bills, so it’s worth exploring any options offered by your employer.
Possible benefits you might be able to tap:
• Health Reimbursement Arrangements (HRA): Employers fund HRAs to help employees cover qualified medical expenses. You may want to check with your HR department to see if this benefit is available and how to access it.
• Health Savings Accounts (HSA): If you have a high-deductible health plan, an HSA can be used to pay for eligible medical expenses with pretax dollars. This account can also be used to cover deductible costs, prescriptions, and certain treatments.
• Flexible Spending Accounts (FSA): Similar to HSAs, FSAs allow you to use pretax funds for medical expenses, but they usually have a “use it or lose it” policy, meaning funds must be spent within the plan year. You’ll want to use your FSA funds strategically to cover eligible medical costs.
• Health stipends: Some employers offer additional financial support in the form of taxable health stipends, which can be used for medical bills or health-related expenses. Contact your HR department to explore this benefit.
What to Do If You Can’t Negotiate Lower Medical Bills
If you’re unable to negotiate your medical bills to an affordable price and your employer doesn’t offer benefits like HRAs or stipends, you’re not necessarily out of options. Below are two ways you may be able to affordably finance your medical bills.
• Personal loan: An unsecured personal loan can be used for virtually any purpose, including paying medical bills. Interest rates can be significantly lower than those of credit cards, particularly if you have strong credit. And unlike credit cards, personal loan rates are typically fixed, allowing you to pay off your debt on a fixed payment schedule. If you can qualify for a personal loan with a good rate and manageable monthly payment, you might use it to pay off your medical bills immediately and avoid accruing late fees or having the bill move into collections. A personal loan calculator can help you run the numbers.
• Zero-interest credit card: If you have strong enough credit to qualify for a credit card with a 0% introductory rate, you may be able to put the bill on your card then make interest-free payments for 12 to 21 months. Additionally, some providers offer medical credit cards with interest-free promotional periods, which may be anywhere from six to 24 months. These can help you pay off large bills over time, but be cautious of high interest rates once the promotional period ends.
Recommended: Personal Loan vs Credit Card
The Takeaway
Medical bills can be overwhelming, but they aren’t necessarily the last word. You may be able to negotiate the amount due by requesting an itemized bill, checking for errors, exploring financial assistance programs, and simply asking for a lower bill. Other tools that can help make medical bills more manageable include setting up an interest-free payment plan, tapping employer health benefits, and taking advantage of low-interest financing options.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
FAQ
Do medical bills affect your credit?
If the medical bill stays with your provider, it won’t impact your credit. If your payment is several months past due, however, the provider may sell your debt to a collections agency. Unpaid medical debt in collections (over $500) can be reported to credit bureaus after one year.
If medical debt does end up on your credit reports, it can lower your FICO® score. However, due to recent changes in how FICO calculates scores, medical debt generally has less impact on your scores than other types of debt.
Should I pay a medical bill that’s gone to collections?
Paying a medical bill in collections can protect your credit and resolve the debt, but you’ll want to first verify it’s legitimate. To ensure the debt amount is correct and has not already been paid, ask for documentation from the collection agency.
If the debt is valid, consider negotiating a reduced payoff amount or setting up a payment plan. Once paid, it’s a good idea to ask for written confirmation that the account will be marked as resolved. Under new guidelines, paid medical collection debt is no longer included in credit reports.
How long do I have to pay a medical bill?
The timeline to pay a medical bill varies depending on the provider’s policies. Many hospitals and health care providers expect payment within 30 to 90 days of issuing the bill and will charge late fees and/or interest if you miss the due date.
The statute of limitations — how long a provider or collection agency has to sue you for an unpaid medical bill — typically ranges from three to 10 years, depending on the state. However, the debt remains collectible even after that period.
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