A guide to negotiating and dealing with medical bills
Recently, a family member got into a very difficult and stressful situation. He received a notice from a collections agency trying to collect medical debt for anesthesiology services he received over a year ago. Because he received surgery before the new protections offered for consumers through the federal “No Surprises Act,” ("NSA") he did not have as many options as consumers have today. However, he does live in a state which has its own version of protections against medical billing. If you're dealing with a medical bill from before 2022, google "[your state name] + surprise medical billings" to see if there are any local laws offering protections. You can also check out this resource on state Consumer Assistance Programs that help consumers dealing with health insurance related problems.
In summary, I helped him get a $16,000 bill negotiated to $1,500. I put this blog post together for anyone who may be undergoing a stressful medical billing situation for themselves or a loved one and needs some guidance on what to do or which resources to look at. A quick disclaimer: this blog post is not financial advice and is strictly for informational/educational purposes. Please do your own research to make the best decision for you and your particular situation.
After much research to assist my family member and multiple calls with different organizations, including the No Surprises Help Desk (1-800-985-3059), Resolve (a startup that helps with medical billing issues), and the collections agency, I thought I would share some tips that helped us get through this stressful situation.
Check the basics to see if this medical bill is legitimate. You want to make sure this is not a scammer trying to rip you off but a legitimate debt outstanding.
Review the bills and make sure it is yours, shows your correct name and billing address, insurance information, any payments made.
Look at the bill to check if the listed items are the medical services/treatments you actually received. If anything is unclear, ask your provider (doctor or hospital) to provide you with an itemized bill in plain language so you can understand what it is you are being billed for
Be aware of your rights and protections under the law. For example, medical debt collections agencies cannot harass you with calls if you tell them to stop calling you and only contact you via mail. Check out this post by the Consumer Finance Protection Bureau (CFPB) to understand your rights. If a debt collector is behaving in a harassing or otherwise illegal manner, you can file a complaint with the CFPB here.
Be aware of what is required of you. For example, if you receive a notice in the mail stating that you must reply debt collection agency’s notice, e.g., to file a dispute, request more information, etc., there is usually a deadline they will provide. Simply ignoring the issue will not help. If the debt is legitimate, they are able to attempt to collect the debt and have the option of suing you to receive the money (and if they win the lawsuit, they could place a lien on your house or garnish your wages). It is better to respond to their notice and attempt to negotiate a solution (discussed below) before things get out of hand.
Be aware of your financial responsibility beforehand. If you are uninsured (self-paying), healthcare providers (in particular, “the convening provider” a.k.a. the provider who is scheduling the primary procedure) are now required to provide a good faith estimate of medical items and services meaning they have to give you a realistic estimation of your bill.
If the bill you receive exceeds the GFE by $400 or more, the NSA offers a process to dispute charges. Once the patient opens a dispute, providers cannot try to collect payment or charge additional fees until the case is resolved.
You can call the No Surprises Help Desk (1-800-985-3059) and have them open up a dispute or you can directly fill out the form here.
Submit an appeal to your insurance company and/or double check to make sure they paid the most they could towards the bill. Often times, this is a required step in filing a complaint with your local state agency, so this is the first place you should start. You can usually submit a review of a claim online or by calling your health insurance provider.
Now if you are dealing with a medical bill from before January 1, 2022 and the NSA doesn't apply or some other loophole, here are some steps you can take.
Research what a fair cost for the service you received should be in your area. You can use the FAIR Health Consumer database to understand the range of reasonable costs for the services received (based on zip code, CPT code (ask your provider or check your insurance Explanation of Benefits), insured/uninsured, etc.). If you receive a bill for an amount significantly greater than what a fair amount is, then you may have some wiggle room when it comes to negotiating with the provider or debt collection agency.
Try to resolve medical billing issues directly with the physician’s office or hospital directly. If you do not respond and they are keen on collecting payment from you, they will keep trying to collect payment for some amount of time before sending the debt to a collection’s agency. It is much easier to try to negotiate with the provider’s office versus the billing collections agency. Also, at this point, the billing collections agency could also report unpaid debt to credit agencies which could negatively impact your credit score.
Tips for negotiating with the provider’s office or debt collection agency.
I have very limited data on what debt collection agencies are willing to settle for but in the two cases I have seen, my own and my family member's mentioned above, they settled for about 10%. Sometimes it takes several phone calls to get there. Sometimes, they'll give you a discount if you just ask for it. When I spoke to Resolve, they mentioned that on average, they can get bills down about 60% (they take a 10% cut of whatever they help reduce).
Ask about waivers, discounts, and fees:
Which fees can be waived? I would want to pay off the agreed upon bill in full, but won't be able to unless some of the fees are waived.
I know many providers offer medical bill relief - can you tell me about yours?
What discounts do you offer for financial hardship?
They might ask you to make an offer. This is where the negotiating part comes in.
If you negotiate it to a reasonable price that you can afford, sometimes the last push to getting them down a bit more is by saying if they can meet you at the price you want, you will pay the amount in full right away. Debt collection agencies like this because they don't have to chase you down and worry about future payments coming through. They can be done with your case and move on.
If the agreed amount is too large for you to pay at once, ask about a payment plan:
Do you have a payment plan available? e.g., I would want to pay off the agreed upon bill in full, but won't be able to unless some of the fees are waived
Stay calm, research and review your rights, and ensure you are advocating for yourself. Speaking with providers or debt collection agencies can be extremely stressful but know that by doing the research and negotiating with them, you have a very good chance of saving yourself your hard-earned money.
Best of luck with the process and if you need help negotiating a bill, feel free to drop me a note.