Facing either long-term or short-term illnesses, the process of recovery itself can be challenging, and when coupled with high medical bills, the resulting debt undoubtedly puts a heavy strain on financial situations. Unfortunately, many Americans are dealing with medical debt issues.
According to data from the Kaplan Collection Agency, 36.3% of American households carry some form of medical debt, and the total amount of medical debt currently in collections is estimated to be between $194 billion and $303 billion.
However, there are ways to avoid or at least reduce medical debt. Many people are unaware that medical bills can be negotiated. Understanding how to negotiate can potentially lower the financial burden you have to bear.
The first step in negotiating medical bills is to confirm whether what you received is indeed a medical bill or an insurance notice.
Carefully examining the received documents is crucial to ensure that it is indeed a bill sent by the healthcare provider, hospital, or medical testing facility.
Usually, you will receive an Explanation of Benefits (EOB) from the insurance company. This is not a bill but a notice that explains how much the insurance company will pay and which expenses you need to cover.
After receiving the formal medical bill, carefully check for any errors.
According to data from the medical billing optimization organization AltuMed, up to 80% of medical bills contain errors, some of which may lead to overcharging patients.
According to the advice from the American credit agency Experian, you should request an itemized bill from the healthcare provider, which should include the charges from the hospital and medical testing facilities. This bill should list out each charge you incurred with specific amounts and corresponding medical billing codes.
If you need to understand the meanings of the codes, you can use search engines like Google. Input the code (for example, the code for pneumonia is ICD-10), to see its definition.
There are free online tools for medical code searches such as the AMA’s CPT Code Search, which can help you confirm what specific charges represent in terms of services.
If codes on the bill are missing or unclear, contact the healthcare provider or insurance company to request a clear explanation in plain language.
You can use these codes to check for errors on the bill item by item. For example, confirm if you were charged for medical services you didn’t receive or for medications you didn’t use, and check for duplicate charges.
Additionally, it’s wise to research in advance to understand if the medical services you received were charged at reasonable prices in the market. You can use platforms like Healthcare Bluebook and Fair Health to inquire about the approximate costs of medical services.
According to the advice from the well-known community health insurance advocacy project Community Health Advocates, if you cannot pay off the medical bill in one go, you can explain to the healthcare provider or billing personnel that you need to set up a payment plan and inform them of the amount and frequency of payments you can manage.
If they disagree, you can explain that you do intend to pay the bill, but your current financial capacity can only afford the amount you proposed.
Once both parties establish a payment plan, you should stick to making payments as agreed upon.
Another option is to propose a lump-sum settlement plan to negotiate bill discounts. For instance, if you owe $2,000, you can inquire if they are willing to let you pay a lower amount, such as $1,000, to clear the debt at once.
Any agreement reached should be confirmed in writing by the other party.
If a debt collection agency contacts you, you can inquire whether they are collecting the debt for themselves or on behalf of a third party. In other words, first confirm if the collection agency has purchased the debt.
Understanding this will help you determine how to proceed with negotiations.
You can request the agency to provide debt verification documentation. This will require the collection agents to confirm that you are the debtor they are pursuing and provide evidence that you indeed owe the debt. If you are still unsure, you can request additional proof.
Sometimes, collection agencies may refuse to verify the debt or engage in negotiations. In such cases, as advised by Community Health Advocates, you should send a letter to them. The letter should state:
– You requested verification of the debt.
– They did not provide relevant proof.
– You request them to cease contacting you.
It is recommended to send this letter via certified mail and keep a copy. If they continue contacting you, you can seek legal advice and ask relevant organizations supporting fair debt collection practices for legal assistance.
If you eventually reach an agreement with the collection agency, ensure they confirm the agreement in writing.
According to Community Health Advocates, hospitals must provide financial assistance to aid individuals in paying medical bills.
You can request financial assistance application forms from healthcare providers, medical testing facilities, or hospitals, and correspond with them to apply for financial aid.
In the letter, include your account number, amount due, and the date of the medical service received. This information is usually found on your medical bill.
Explain in the letter that you are applying for financial assistance. Describe your financial situation, state your inability to pay at the moment, mention your employment status, and outline the other financial expenses you are currently responsible for.
You may feel inadequate or unwilling to negotiate medical bills yourself. The good news is there are professional companies and individuals who can review your medical bills and negotiate with healthcare facilities on your behalf.
However, it’s crucial to note that these services may charge a one-time fixed fee. Some companies charge a percentage of the amount saved on your behalf, while others combine these two fee structures.
Additionally, the benefits provided by your employer may also include medical bill negotiation services.
Before paying medical bills, understand your options. Many people are unaware that medical bills do not necessarily have to be paid in full according to the original amount.
According to data from the Emry Health platform, which specializes in optimizing and advocating for healthcare costs, hospitals often provide significant discounts through financial aid programs.
If other methods prove unsuccessful, seeking assistance from professional medical bill negotiators may be beneficial for you.