How To Negotiate Medical Bills: A Step-by-Step Guide

Learning how to negotiate your medical bills may help lower your healthcare costs. You can ask the billing office about possible errors on your medical bill or a reduced cost. You may also consider appealing your insurer’s decision.

Carefully review your explanation of benefits (EOB) and medical bill. Contact the billing office about errors or high costs. You can also apply for Medicaid or ask for a payment plan.

You do not want to pay any part of your medical bill until you have carefully reviewed it and completed your negotiations. Plan to negotiate sooner rather than later.

Medical debt is treated differently from other types of debt. The three major credit reporting agencies only report nonpayment on medical bill information after one year.

Understanding Insurance Charges

You will receive an EOB that tells you about the cost of your services before getting a medical bill. You can use an EOB to see your annual visits, lab tests, and screenings. It will list the date of each service and the total cost of your care.

An EOB also shows how much your health insurance covers and what you can expect to pay. There are different types of charges, such as:

• Allowed charges: This is the maximum cost a healthcare provider will receive for your services.
• Paid by insurer: This is what your insurer will pay a healthcare provider if you have health insurance.
• Provider charges: This is the total amount a healthcare provider charges for your services. 
• What you owe: Also called “patient balance,” this is what you owe after your health insurance pays.

Remark codes are two- or three-character codes that explain more about the costs of your services. You can find a description of each remark code at the bottom of your EOB.

An EOB will also include a claim number you can use for reference if you have questions about your medical bill.

Reading a Medical Bill

Medical bills include information about you, the healthcare provider billing you, your services, and the dates of these services. Check to make sure all of that information is correct. Contact the healthcare provider’s billing office if any information seems incorrect or unfamiliar. 

Your medical bill will include the total cost of your care, including what your insurer paid and what you are responsible for. Double-check that the charges of your medical bill match what it says on the EOB.

You will use the account number provided on your medical bill to pay your balance. You can give the account number to the billing office if you have questions or concerns.  

“The first step when negotiating medical bills is to ensure there aren’t any mistakes,” Andrew Latham, a certified personal finance counselor and managing editor for SuperMoney, told Health. Call the billing office and ask them to recode and re-bill your insurer if you notice an error.

You can double-check that what you owe is accurate by scanning your medical bill for errors. Use these tips to check for possible errors:

• Compare your EOB with your medical bill
• Consult your insurer to fix errors on your medical bill and provide a copy of your EOB
• Make sure a healthcare provider only bills you for services you received
• Request a copy of your medical records, and tell the billing office if they charge you for additional services
• Scan your medical bill for duplicate charges

Ask the billing office for an itemized list of costs for each service you received. You can use the detailed medical bill to compare further with the charges listed on your EOB.

You can search online for information about the medical billing codes listed on your itemized medical bill. These codes describe your conditions and any services and supplies you received. 

Enter the code and “medical billing code” in a search engine to view a description. Tell the billing office if the description does not match your services.

See if you qualify for Medicaid if you do not have and cannot afford health insurance. Medicaid is a program that provides free or low-cost medical coverage to people with low income, older adults, pregnant people, and those with disabilities.

In some states, Medicaid coverage works retroactively. It may pay for medical bills incurred over the past three months. Be sure to check what is allowed in your state.

Medicaid eligibility requirements vary between states, but you must meet these general requirements to be eligible:

• Be a citizen of the United States
• Be a resident of the state you are applying for
• Have a low or very low income

Reach out to the billing office to ask for a reduced fee. You can usually find their phone number on your bill. 

“Ask if you qualify for charity care or financial assistance programs,” said Latham. “Just asking for this can often cut your debt in half. It is worth noting that all nonprofit hospitals are legally required to have these programs, and many for-profit hospitals have them.”

The billing office may decide on a reduced fee based on your income level, so have a recent tax return handy. 

“Even if your income is too high to qualify for charity care, you can still get a reduction of your bill if you can show the medical bills are causing you financial hardship,” said Latham.

Research the average cost of your procedure in your state. Healthcare Bluebook and Healthcare Cost and Utilization Project provide data on the average price of several medical services.

Under the Affordable Care Act (ACA), you can appeal if your insurer does not pay for your services. Your insurer must provide information on how to file an appeal.

You can appeal a claim in two ways: an internal or external appeal. In an internal appeal, your insurer will thoroughly review its decision. 

You can also ask a third party to lead the review in an external appeal. Your insurer must pay the cost of an external appeal. Your state cannot legally charge you more than a nominal fee for an external appeal.

Reach out to a patient advocacy group if the billing office cannot lower a charge to a rate within your budget. They often have financial assistance resources and programs to help people with financial burdens.

Consider negotiating a payment plan with the healthcare provider if what you owe causes financial stress.

“If you have medical bills you can’t afford, don’t put them on your credit card,” said Latham. Hospital and clinic bills are often interest-free. A credit card can charge you extra money in interest, so you will pay more over time.

Always prioritize other major bills like car payments, rent or mortgage, and utilities over a medical bill. Nonpayment of a medical bill will not result in an immediate negative consequence, such as an eviction or foreclosure.

Do not panic if your medical bill has already gone to collections. You can negotiate with a creditor for an interest-free or low-interest payment plan with affordable monthly installments. Do not pay a creditor with a high-interest credit card.

Take the time to double-check for any errors on medical bills, and negotiate for a reduced cost. There are also resources, like advocacy groups and Medicaid, that can help you pay off debt.

Thinking about that upcoming medical bill may be stressful after any procedure, hospital stay, or appointment. Remain calm, and chip away at it bit by bit.