How to Negotiate Medical Bills

Have a monster-size medical bill? Negotiate it down to a more manageable size.

Difficulty: Average

Time Required: Varies

Here's How:

1. Don't wait. Whenever possible, ask for a discount before the procedure or service has been provided. Speak candidly with your doctor or the service provider about your circumstances. If you don't have insurance or you're unemployed, say so. If you're living on a fixed income, a low income or there are other factors that will make it difficult for you to pay, he needs to know that too. Many offices and institutions have programs in place to help those who need it, but they won't know that you need help, unless you tell them.

2. Keep at it. If your initial request for a discount is shot down, try to lure them in with cash. Ask your doctor (or the billing manager), if they'd be willing to give you a discount for paying in cash. Point out that your cash payment will save them credit card fees and hassle. If they still seem hesitant, offer to pay at the time of service (instant cash flow is hard to say no to).

3. Go after old bills. Sometimes circumstances make it difficult or impossible to negotiate medical bills in advance. That's okay; you can still win the battle. Start by looking up the fair market price for the care that you received. This is the amount that providers regularly accept from insurance companies as payment in full, and the amount that you should aim for in your negotiations. You can find this information in the Healthcare Blue Book.

Once you have this information, contact the billing department, and use the same tactics described in steps 1 and 2 to negotiate a lower payment. If the person you're speaking to turns your request down, politely ask to speak to his/her supervisor. Keep moving up the chain until you reach someone who's willing to help you or you reach the final authority on the matter.

4. Negotiate payment terms. Occasionally you're going to run into a service provider that just won't budge on their price. Bummer. When you find yourself in this situation, don't give up and whip out your credit card (that will just add interest to an expensive bill). Instead, work to establish a payment plan that meets your needs. Tell the billing representative how much you are able to pay and when you are able to pay it. If they ask for bigger payments (and they might), explain that you can't afford to do more. Do not, under any circumstances, offer (or agree) to pay more than you can afford. Getting behind in your payments will kill any future negotiating power that you may have.

5. Make good on what you promised. If you agreed to pay at the time of service, do it. If you agreed to send in regular monthly payments, get those payments in on time each and every month. Failing to do what you promised, could cause the provider to rescind any discount that was extended to you, and land you in collections.

Tips:

1. Remember: Insurance companies negotiate with healthcare providers all the time. You can do it too (and no one will think you're cheap for doing it).

2. When you get a bill that you can't afford to pay, call the billing department to let them know right away. They'll be much more likely to work with you, if the bill isn't delinquent.

3. Stay polite. No one wants to help a rude person.

4. Don't stop with your doctor's fees and hospital bills. You can negotiate dental work and lab fees too.