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How to Negotiate a Surprise Medical Bill

Don't be afraid to ask your doctor or hospital about taking less money or giving you more time to pay

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Has your insurance company turned down your appeal on a large medical bill? You may still be able to work out a better deal by trying to negotiate your out-of-pocket costs directly with a hospital or medical provider.

“A billing office is probably more interested in working directly with you to collect payment than selling that debt [to a collection agency] for pennies on the dollar, so chances are good that if you’re working with them in good faith, they will call off the collections,” says Caitlin Donovan, spokesperson for the Patient Advocate Foundation.

Even if a bill has gone into collections, you’ve got some time to negotiate, as medical debt will not appear on your credit report until 180 days after it has been reported to a credit bureau.

Contact the billing department at the hospital or medical practice to get the process started. Donovan suggests bringing a family member or friend to the negotiating sessions, for moral support and to help you remember what was discussed. “It takes a lot of strength, time and patience, and that can be hard to come by if you aren’t feeling well,” she says.

Here are some more tips for trying to settle a bill directly with a health care provider.

Get the data

Figure out how much you can afford to pay, then look up the average cost for the procedure or treatment you underwent. Consider checking Healthcare Bluebook or FAIR Health Consumer, websites where you can check typical prices in your area for a procedure or course of treatment.

Take a look, too, at what Medicare pays for a procedure and the rate your health plan pays for the service at in-network facilities. If you were balance billed because an out-of-network provider took part in your treatment without your knowledge (and charged you the balance between his or her fee and what insurance covered), these figures can serve as starting points for negotiation.

Consider “prompt pay”

Sometimes a medical provider will accept far less money if you agree to pay immediately. A doctor would rather work to reach a settlement than get nothing, says Martine Brousse, a medical billing advocate based in Los Angeles.

“It’s not abnormal to pay 80 percent of a bill within a specified time if the provider agrees to waive up to 20 percent of the fee,” she says. But remember that promptness is the point, so be prepared to remit the full agreed-upon amount in a matter of days.

If it’s late in the year, you may have a better chance of striking a deal, Brousse adds, because hospitals, doctors and other providers may be more open to negotiation when their financial offices are trying to close out the annual books.

Sometimes a medical provider will accept far less money if you agree to pay immediately. A doctor would rather work to reach a settlement than get nothing, patient advocate Martine Brousse says.

Ask for an installment plan

If you can’t negotiate the bill down, ask the provider if you can set up an interest-free payment schedule. It’s important to know going in what you can afford to pay monthly and for how long. If you make your initial payments in full and on time, the billing office might be willing to reconsider a discount or write-off on the rest of the bill. (Learn about ways to pay off outstanding medical bills.)

Get professional help

When your bill is very high or you’ve exhausted your ability to negotiate on your own, think about hiring a professional, such as a medical billing advocate or an attorney who specializes in medical billing disputes. You can ask your state’s bar association for a referral.

Medical billing advocates work with patients to review bills for errors and negotiate lower costs. There are both for-profit and nonprofit advocates. The Patient Advocate Foundation, for example, will do this work for free, but only if you have a chronic, life-threatening or debilitating medical condition that has been diagnosed. 

Professional advocates will either charge an hourly fee or take a percentage of what they save you. “The higher the bill, the lower the percentage I’ll take,” says Adria Gross, founder and CEO of MedWise Insurance Advocacy and MedWise Billing, companies that help patients navigate medical bills and insurance claims.

In looking for a billing advocate, focus on the person’s level of expertise. Many previously worked at insurance companies or in the billing offices at hospitals or medical practices; their websites should comprehensively list their skills, experience and credentials. You can search for billing advocates in the online directories of industry groups such as the National Association of Healthcare Advocacy, the Alliance of Professional Health Advocates and the Alliance of Claims Assistance Professionals.

State officials such as insurance commissioners and attorneys general may be able to help as well. 

Gross took on a client who received a surprise hospital bill for $14,000 after having a bone spur removed. She says he should have been billed $1,800 — the amount left on the out-of-pocket limit for his health plan — but she got nowhere attempting to negotiate with the hospital, the broker who sold her client the policy or the company handling the claim, all of which were located in different states. After several fruitless months, she reached out to the insurance regulator and attorney general’s office in the client’s home state. They contacted the hospital, which agreed to reduce the bill to $1,800.

“In the end, if you’re certain you’re correct about your medical bills but keep getting denied by your providers, dig in your heels,” Gross advises. “You should never give up the fight.”

AARP’s Money Map can help you take control of unplanned expenses and get you on back on track to financial stability.