How to Negotiate Medical Bills with Hospitals and Insurers

Medical bills can be overwhelming, especially in the United States, where healthcare costs are notoriously high. However, many people are unaware that medical bills are often negotiable. Whether you're dealing with hospitals or insurance companies, there are strategies you can use to reduce your financial burden.

Follow this step-by-step guide, which will help you navigate the negotiation process and potentially lower your medical expenses.

1. Carefully Review Your Medical Bills for Accuracy

Before proceeding with any negotiation, it's important to cross check that your medical bills are carrying a mistake. Medical billing errors are very common and can lead to overcharges for services that you never asked for or received.

Here is how you might review your bills:

1. Request an Itemized Bill: Contact the hospital or medical provider and ask for an itemized statement. This detailed bill lists every service, procedure, and medication you were charged for.
2. Cross-Check Error: Find errors in overcharges, incorrect date of service rendered and services/procedures that you did not receive. You should ensure that you received all the services indicated.
3. Cross-check with the insurance payment: Compare the itemized bill with the Explanation of Benefits from your insurance company. Ensure that the insurer has paid its share correctly and that nothing wrong was done in the billing codes that caused a split error.

According to a study published in the Journal of the American Medical Association, up to 80% of medical bills contain errors^[1]. Always double-check your bills, as even small errors can add up to significant overcharges.

2. Know Your Health Insurance Coverage

Knowing the specifics of your insurance policy empowers you during negotiations.

Important elements to review include:

1. In-Network vs. Out-of-Network Providers: Confirm whether the hospital and all the physicians who treated you are in-network. Out-of-network services often cost more and may not be fully covered by your insurance.
2. Review Your EOB: Your Explanation of Benefits outlines what your insurance covers and what you're expected to pay. Charges should, therefore, coincide with your coverage terms.
3. Learn about the appeals process: if your insurance company does not cover certain treatments or services, collect medical documentation from your healthcare provider to present as further supporting evidence in your case.

For more information on insurance appeals decisions, please visit the Patient Advocate Foundation.

3. Negotiate with the Hospital Billing Department

If you believe that your bills seem too high, or you simply feel that you are getting overcharged, contact the hospital's billing office. Most hospitals are willing to negotiate, especially if you face financial hardship.

Here's what you can do:

1. Explain Your Financial Situation: Be honest about not being able to pay the full amount. If available, provide supporting documents. Most hospitals have programs for financial assistance or charity care for low-income patients.
2. Ask for a Reduction: Politely ask if the hospital can waive some of the bill. Mention any errors you can find or use the Healthcare Bluebook to compare the costs to typical prices in your area for services like these.
3. Set Up a Payment Plan: If you cannot pay in full, ask if they have an interest-free installment payment plan. This might mean you get to pay over time without further accumulating fees.

4. Negotiate with Your Insurance Company

If your insurance coverage falls short of your expectations, consider negotiating directly with your insurer:

1. Ask for a Re-Review: Call your insurance company and rectify miscommunication or clerical errors. In some cases, claims are denied due to simple clerical mistakes that are easily corrected.
2. Official Appeal Submit: If no decision is reached through evaluation, then there will be an official appeal. Record explanations should include supporting medical documentation from your personal physician.
3. Leverage State Laws: Find out about your state's consumer protection laws on medical billing. Legislated measures exist in some states that protect patients against surprise medical bills. This will make your bargaining power even stronger.

5. Consider Hiring a Medical Billing Advocate

If the negotiation process becomes too complicated, a medical billing advocate can help end it.

1. Professional Help: Advocates are trained to identify billing errors and negotiate with medical providers and insurance companies on your behalf.
2. Cost of Services: While they charge for their services—usually a percentage of the savings they achieve—the reduction in your bill often outweighs the fee.

Contact the Alliance of Professional Health Advocates to locate a good advocate.

6. Check Programs for Financial Aides

Various programs can help reduce or eliminate your medical bills:

1. Hospital Charity Care Programs: Non-profit hospitals are required to offer a level of free or reduced-cost care. This eligibility, however, is normally based on income and financial need.
2. Government Support: Many citizens have access to Medicaid and Medicare. To see if you qualify, go to either Medicaid.gov or Medicare.gov.
3. Non-Profit Organizations: Some of the non-profit organizations include the HealthWell Foundation, which helps patients by providing funding for medical costs.

7. Ask for Cash Discounts

Cash payments can sometimes be made for much discounted prices:

1. Upfront Payments: Hospitals and physicians will find it more attractive to obtain direct payment to avoid the administrative costs of insurance claims.
2. Negotiate the Rate: If you can pay a percentage or the full amount in cash, ask if they can give you a deal. Make sure that any discounts agreed upon go in writing.

8. Be careful with Medical Credit Cards

Some providers offer a medical credit card or financing options:

1. Understand the Terms: These cards may offer interest-free periods, but high interest rates can apply afterward. Read the fine print carefully.
2. No Accrued Interest: Use this option only if you are certain that you will pay off the balance before interest is incurred.

9. Consider Bankruptcy as a Last Resort

If you have tried every available alternative and still can't manage the debt:

1. Understand the Implications: Filing for bankruptcy can discharge a medical debt but leads to severe long-term consequences on your credit score and future financial outlook.
2. Seek Professional Advise: Consult this option with a bankruptcy attorney to understand what lies ahead.

For more information, visit the U.S. Courts Bankruptcy Basics.

Conclusion

Medical debt can be extremely burdensome, but you're not without options. Carefully read your medical bills and understand what is covered through your insurance. Proactively negotiate with the providers beforehand. Remember that a hospital would normally like to collect at least something rather than nothing at all; hence, it may even be willing to negotiate with you more than what you anticipate. Don’t forget to seek the guidance of professionals or avail yourself of financial assistance programs to better handle medical bills.

References:

1. Journal of the American Medical Association. (2018). "Prevalence of Billing Errors in U.S. Hospitals."
2. Consumer Reports. (2022). "Success Stories in Medical Bill Negotiation."
3. Kaiser Family Foundation. (2021). "Claims Denials and Appeals in ACA Marketplace Plans."
4. NPR. (2019). "How Charity Care Helped One Patient Avoid Medical Bankruptcy."