How to Negotiate Medical Bills Without Losing Your Sanity

Medical bills are stressful but you may be able to negotiate them to be more manageable.

negotiating medical bills
Updated May 13, 2024
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The average American household spends nearly $5,000 on healthcare costs each year — amounting to almost 7% of a household’s income.

While that might not seem like a lot to spend, the reality is that 26% of Americans have had trouble with medical bills in the last year, according to the Kaiser Family Foundation. Among those with insurance, 20% report difficulty with medical bills, while that number jumps to 53% for those who don’t have health insurance.

No matter your situation, it’s possible to find yourself struggling to figure out how to pay off debt from medical bills, and your insurance might not completely alleviate the problems. If you’re facing a big healthcare expense, here’s how to negotiate medical bills in collections.

Review your bill and check for accuracy

“Get an itemized copy of your bill,” says Leslie Tayne, a consumer debt attorney. “This is key because it allows you to spot any errors.”

Read your bill carefully and make sure that you actually received the services you’re being charged for. Tayne also suggests making sure you authorized the services you received.

Next, she suggests following up with your insurance company to make sure they paid out the funds, and verify what your portion of the bill is.

“During the process, you may find that you were charged for a service you didn’t receive, or that an insurance billing code was mismatched,” says Tayne. “These things could be costing you, and you should contact the billing company right away.”

After the bill is corrected and your price has been adjusted, you should owe less. If you’ve already paid, file an appeal — using your itemized bill as proof — and you should be able to get a reimbursement.

Finally, if you’re drowning in medical debt and aren’t sure what to do, check the statute of limitations on medical debt collection in your state. Depending on the situation, if the debt is old enough, you might not have to pay it.

Keep good records and lines of communication open

Don’t ignore medical bills. While you can settle medical debt in collections, it’s easier to negotiate medical debt before it gets to the collections point. So start with your medical bill before it becomes debt.

Next, as you look over your bills and talk to various people, be sure to keep good records.

“Document everything,” suggests Lynn Price, a negotiation consultant and author of the book Negotiate It!. “Keep track of who you talked to, dates and times, how long you spoke, and what you talked about.”

Price also suggests getting copies of your bills and any correspondence (snail mail and email) from the service provider, insurer, and billing company. Keep track of everything, and feel free to highlight important information and cross reference it with your notes from your phone calls.

How to negotiate a reduced medical bill

It’s better to get a reduced medical bill up front, rather than negotiate medical debt after it’s already gone to collections. Here are some tips that may help you negotiate a lower bill.

  • Discuss any hardship you have: “Most hospitals have a financial services department where you can complete a hardship packet,” says Tayne. “You might be able to negotiate a lower bill based on your hardship.”
  • Offer a lump sum: Tayne also says that if you can offer a lump sum, you might be able to get a lower overall cost because you’re willing to pay a percentage of the bill immediately.
  • Ask if there’s a discount for those without insurance: Some service providers offer lower prices if insurance isn’t involved.
  • Don’t be afraid to ask for a manager or supervisor: “Often getting to the right person is key,” says Price. “If you’re being stonewalled, respectfully ask to speak with someone else.” Many hospitals and insurers have ombudsmen, who are meant to advocate on behalf of the consumer. They might be able to help you navigate the system and work out a solution.

Repayment options for medical bills

Sometimes, managing your medical bills is more about hitting on the right repayment options. If you haven’t been sent to collections yet, Tayne says it makes sense to negotiate a payment plan with your provider.

“Many medical bills are interest-free, so consider a payment plan in your budget as an offer to resolve the matter,” says Tayne.

Some service providers, instead of managing their own payment plans, make arrangements with credit providers. You can set up payment plans through these creditors, but it’s important to understand these are loans, and you’ll pay interest on them.

How do I settle debt in collections?

If you’re trying to figure out how to get out of debt and settle medical bills in collection, you’ll have to negotiate medical debt with the collector, not the service provider.

You can work out a payment plan, based on your budget, or you can ask to pay a lump sum, which might be less than what you owe. In either case, make sure you get your debt settlement letter and review the terms, and be sure to follow the terms so you don’t end up with a lawsuit.

What if you can’t negotiate?

If you’re not having success negotiating your medical debt, it’s important to understand your options. You might be able to get a medical debt consolidation loan to help you pay your bills, although that leads to paying interest. But it would at least stop you from being sent to collections, and you might end up with a more manageable monthly payment.

Another option is to get help understanding your rights. This is especially important if you’re trying to negotiate with a collections agent. Look at your state laws to determine whether collectors can come after you. In some cases, debt collectors need to provide validation letters, and if they can’t prove that you’re the one responsible for the debt, you might not have to pay it.

“Don’t even discuss payment until the debt collector can prove you’re actually responsible,” says Tayne. “Don’t agree to pay anything until they’ve done their job of proving what you owe.”

You can also look into minimum and maximum lawsuit amounts, and understand which of your assets are protected if a debt collector or service provider chooses to sue you. In some cases, if the statute of limitations has passed, negotiation may not matter because collectors may not be able to come after you anyway. A knowledgeable attorney can help you figure out if you should pay medical bills in collections.

Bottom line

In most cases, you’re better off taking care of medical bills before they become debt. If you can work out a payment arrangement with the provider, you might not have to worry about negotiating medical debt with a collector later.

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Author Details

Miranda Marquit

Miranda Marquit has covered personal finance for more than a decade and is a nationally-recognized financial expert and journalist, appearing on CNBC, NPR, Forbes, Yahoo! Finance, FOX Business, and numerous other outlets.