How to Negotiate a Medical Bill

Before you go knocking down the hospital finance department's door, take a few moments to familiarize yourself with your insurance policy, which usually features a maximum out-of-pocket amount per patient. If your bill is more than your out-of-pocket max, that's a red flag, says health care claims resolution expert Marc Chapman. If however, the amount is legitimate and in line with your policy, you may get a 5 or 10 percent discount if can pay the bill in full promptly, he says. "It never hurts to ask."

Although medical bills can be long, confusing and tedious to comb through, the process can pay off. "As many as 80 percent of bills contain errors and some of them can be discovered by a patient," emails Derek Fitteron, CEO of Medical Cost Advocate. "Also review your EOB [explanation of benefits] to make sure the proper adjustments were made by the insurance company. Make sure the provider is billing only what is allowed."

Health care advocate Karen Vogel suggests requesting a detailed statement from the provider that includes procedure billing codes. According to Vogel, it's not always easy to differentiate between services because many are packaged into a bundled case rate for insurance reimbursement. She recommends that people, "look for duplicates or things that simply didn't happen." In addition, she says that computer savvy individuals can use online member portals operated by insurance companies and providers to examine all bills and medical visits.

You can also look at sites like FAIR Health and Healthcare Bluebook to find out what the average cost for that procedure should be. "If a hospital charged you more than what you find to be reasonable, that information can be used as leverage for getting the bill reduced," Moss says.

Once you've done your due diligence, approach the billing office first, as many facilities have staff auditors who'll check the bill for accuracy. If they tell you the bill is correct, and you don't have the funds to pay it, find out the provider's financial assistance policy, typically found in detail on their website. There's usually some kind of form to fill out to get help. "Most hospitals will not even bargain until you've filled that paperwork out," Chapman says.

Once you've completed the requisite paperwork, it's time to take things next-level. "I'd recommend visiting the medical billing office of your hospital in person," Moss explains. "It's a lot more difficult to be unyielding to a personal appeal rather than a phone call or email."

Whether in person, by email or on the phone, it's important to be clear in your communication. "You should be open and honest with your provider about financial difficulty," says Fitteron. "If a provider will not reduce the bill for financial hardship you can ask for a payment plan. If your financial situation is difficult enough and you are willing to provide proof of your income and assets, you can apply for charity care at most hospitals."

Indeed, for qualifying people, this extra effort can really pay off. Patient advocate AnnMarie McIlwain recently managed to wipe out a client's $36,000 hospital bill following submission of her financials.

Vogel advises people to shoot for a 30 percent discount on their bill. However, she cautions people to get any promised reductions in writing and to move on it as fast as possible. "Don't let the bill age for more than six months as once it's turned over to a collections agency, the ability to negotiate is limited," she emails.

Also, don't shy away from negotiating even if you think it's going to be an open and shut rejection. "If there are extenuating circumstances (like out of network providers in an emergency situation) a case can be made for asking for a reduction," emails Cindi Gatton with Pathfinder Patient Advocacy Group.

If you decide to go full court press, take steps to prevent the bill from inflating. "If an appeal is filed, tell the provider/billing agency to put your account on hold for at least 30 days, and to block any interest charges while it's under review," Vogel explains.

Successful negotiations are likely to range widely, depending on a number of factors, according to Vogel. "An academic or teaching hospital is going to charge high and negotiate less. They are supporting a huge amount of uncompensated care and complex conditions, and will be less likely to bargain," she explains. However, "a community hospital may be more sympathetic; they have different kinds of funding sources and don't want bad publicity or social media shaming."

If you haven't made any headway with getting your billing reduced — or you're aren't up to the hassle — it's fine to seek the assistance of health care advocates or other independent claims professionals. "They help patients fight erroneous charges and lower medical bills," Moss says. "Most of them do charge a fee, but they are experts in fighting these charges, potentially saving you time and money and certainly the associated headaches." Some agencies will not charge you up front but will bill you a fee that is a percentage of how much they were able to save you, typically to 25-30 percent.

Patient advocate AnnMarie McIlwain notes that she was able to get a client's bill at Memorial Sloan Kettering in New York reduced from $600,000 to zero "through a combination of identifying incorrect coding (it was coded for a bone marrow transplant which she did not have and is enormously expensive), successfully appealing the out of network assignment and a charity care."

You can visit sites like Claims.org, BillAdvocates.com or AdvoConnection to find names of people who will advocate your medical bills on your behalf.