How to negotiate down your medical bills

Ask the Experts: How do I negotiate with my healthcare provider?

Hi! My wife heard a money expert on an NPR show talking about personal finance. She advised people with medical bills, e.g., from medical insurance that covers only 70 or 80%, to negotiate with the hospital or provider. Do you have any material or advice on negotiating with medical providers to reduce the out-of-pocket 20 or 30% not covered by insurance? Thank you very much! -Peter

Hi Peter –

There really is no surefire method to successfully negotiating your medical bills down, because, technically, you owe them and your medical care provider has the right to say, “Nope, pay it all.”

That said, medical providers are usually much more flexible in these things than credit card companies or lenders, because you’re ultimately paying for a service, rather than a good. That’s also why the same procedure performed at the same hospital will often cost a different amount of money, depending on if you have insurance (and what type), because most insurance providers have already negotiated the rate for certain services.

The first step is always to double-check to make sure the bill is correct and that your insurance company has provided the agreed-upon amount of coverage. When your insurance company sends you the statement showing what they did (and did not) pay, it should include information on how to appeal the decision. If you feel that your coverage hasn’t been properly applied, be sure to take advantage of your appeal rights.

Also, many healthcare providers have some variety of financial assistance available to help defray the costs of medical bills. However, this “charity care” is usually reserved for low-to-no income individuals and families.

If your bills are correct and you aren’t eligible for assistance, reach out to the billing department of your medical provider. Ask for two things: to set-up a payment plan and to reduce the amount of your bill. Ideally, they’ll be able to do both, but getting at least one of the two should help.

So how do you talk your medical provider into reducing your bill and setting up a payment plan?

Nicely. Duh.

There are no secret tricks here. Just keep these two things in mind: you owe them what you owe them and they want all of that money. However, if the alternative is getting none of that money, there's usually a happy middle ground to be found.

That doesn’t mean you should be threatening or belligerent. Just be honest and direct. Spell out what you can reasonably afford and explain why what they’re currently asking for isn’t going to happen.

Medical providers (like all creditors) don’t want to see your accounts fall into collection. That’s an immediate loss of potential revenue. They’re also a business and have to watch their own bottom line, so there’s only so far they can reasonably go.

As I said before, most medical providers will be willing to work with you, provided your requests are reasonable. So be willing to spell out why you need what you need and hopefully you’ll be able to find a happy compromise.

Good luck!