You Can Negotiate your Medical Bills and Save Major Ca$h
- 80% of medical bills contain errors, more likely than not, these errors are not in favor of the patient
- You can negotiate your bill by either asking to be charged a specific rate, like the Medicare / in-network rate, or simply stating that you can only afford to pay X amount
- The National Financial Resource Directory contains a list of national and regional resources dedicated to reducing the financial burden of medical treatment
A couple of months ago, I went for a routine dental check-up and was taken aback when told I needed to have all my wisdom teeth removed. Initially, I didn’t have much concern thinking my dental insurance would cover the full procedure. However, to my disbelief, I was informed that I would need to pay roughly $320 per tooth ($1280 in total) because insurance only covered 80% of the cost.
To be fair, NYC can be quite pricey and everything is often charged at a premium. Yet, a quick search of prices in nearby Connecticut and Pennsylvania showed I would’ve probably only saved $200, leaving the bill still unaffordable to me. But to be honest, at this point, I was prepared to go as far as New Hampshire if it meant I saved a couple of hundreds.
Dental Colleges: A Different Model
All of a sudden, my teeth looked like they were going to take up the majority of my saved summer budget. My first action was to argue and questioned if the procedure was necessary (it was). Eventually, I resorted to trying to find a cheaper place to do the procedure.
I knew that college dental schools provide clinical services at reduced prices and accept insurance. Often, they can be as much as 50% less than the private sector.
Here, dental procedures are performed by students under the supervision of professionals. Even though a dental college seemed like a good option, I needed the procedure done in a very short period of time and dental schools are notorious for having very long wait times for appointments.
I needed my surgery done urgently and the appointment at the dental college wasn’t for a month. However, due to the amount of money I would save, I was prepared to wait a bit and so told my dentist I found a cheaper place and needed a referral. It was during my dentist’ reluctance to provide a referral that I sensed that they didn’t want me to go elsewhere for treatment (most health providers don’t want to lose patients).
And so the negotiating began. I asked to see a breakdown of the costs and exactly what I was being charged for. The large bill still didn’t make sense and so I asked the billing department to call my insurance company and see if there had been any errors. After an hour or so (yes, I spent that long asking to see everything), I was told that the pricing had no mistakes.
How I Received a 60% Discount
Eventually, motivated by my dentist’s reluctance to refer me to another practice, I explained that I could not afford the procedure and was basically broke. I negotiated for a while and eventually they agreed to lower the price to $500. I was shocked! You mean all it took was my gentle prodding to receive a $780 discount? (I hadn’t even threatened them yet with my Yelp review, lol)
It was only after this ordeal that I realized that 1) Not many people are aware that they can negotiate medical bills and 2) Why the heck had I been paying full price all along?
Which brings me to the next point, did you know that you can negotiate your medical bills?
With these steps below, hopefully you can save major cash.
1. Check for Any Errors
Did you know that as many as 80% of medical bills contain errors? There are nearly 70,000 diagnosis codes and over 71,000 procedure codes that billing department sift through to categorize a treatment. As a result, errors are often made. More likely than not, these errors are not in favor of the patient.
To make sense of whether a bill is right or wrong, ask for an itemized bill that breaks down every charge in as much detail as a restaurant bill. After you have an itemized bill, look for obvious errors such as procedures you didn’t do and duplications (very common errors).
Flag everything that you have questions about, call the hospital’s billing department and ask for explanations for items that aren’t clear and demand that any errors be removed. Always remember to take note of who you speak with, what you agree on, etc. This would be useful in case of an appeal.
2. Call Your Insurance
Next, call your insurance company and ask about your procedure. Some treatments are not covered because they are deemed medically unnecessary. Straight up ask what you can do to have a certain procedure covered.
Some similar procedures have different diagnosis codes, and the billing department can make a change and resubmit it to your insurer. For example, get a note from your doctor that proves you really did need a certain treatment. Make sure to follow up if required to!
3. Negotiate, Negotiate, Negotiate
Did you know that 57% of people surveyed by Consumer Reports said they successfully negotiated down a hospital bill? Many hospitals would prefer to get a slightly lower payment today than wait for a bill to drag out in collections (more of this later).
You can negotiate by either asking to be charged a specific rate, like the Medicare / in-network rate, or you can simply state that you can only afford to pay X amount.
This is exactly what I did, I named my price and aimed for very low knowing that they were not going to accept my first offer. I suggested $300 and said I would pay upfront in cash. With a bit more haggling, we both finally agreed on a payment of $500.
I opted to pay in cash because I didn’t want to put the debt on your credit card. This is because in case I was unable to pay, I would have been charged high interest, and it would have looked like regular debt to creditors, so any protections associated with medical bills wouldn’t have applied.
However, if you don’t like to haggle, you can hire a medical bill advocate to do so on your behalf and help reduce medical costs.
If you are unable to pay the bill upfront, another option is to ask your medical provider for a payment plan. Many offer instalment payment options with little or no interest.
4. Do You Qualify for Financial Assistance?
There are organizations, such as Patient Advocacy Foundation (PAF), that offers assistance for people whose incomes fall below a certain threshold or who are uninsured. Contrary to popular belief, these limits aren’t always as low as the poverty line, so it’s worth checking out, even if your income isn’t extremely low.
This National Financial Resource Directory contains a list of national and regional resources dedicated to reducing the financial burden of medical treatment.
What Happens if You Don’t Pay?
Should you not pay your bill on time, you risk having the bill sent to a collections agency, which might wreak havoc with your credit report.
The amount of time before a debt goes to collections can vary depending on the health care provider, location or service received. But remember, you can’t make a bill disappear by ignoring it (trust me, I tried).
Having a low credit score can have an impact on a wide number of financial transactions and takes up to seven years to drop off your record, although the impact on your credit score decreases over time. In case this happens, it is important to know your rights, review your options with the debt collector, try to negotiate and offer an amount that you can pay immediately.
How to Prevent Large Bills Next Time
The complexity of the healthcare system makes it difficult to avoid surprise bills. But, if you know that you have to visit a doctor for a scheduled procedure, you can take the following steps to pre-emptively reduce your bill.
- Avoid going out-of-network. Evaluate your options during open enrollment and make sure the plan has doctors and hospitals you want to see
- Call your insurer ahead of time to find out what’s covered and what’s not. Always ensure you take diligent notes and that way if your claim is denied later, you will have backup for an appeal
- Price shop. If you know you need to go into the hospital for a procedure, call around first and compare costs, most hospitals will be able to give you a price