You can't fight city hall, but you might be able to fight the insurance companies. Just ask Connecticut resident Meredith Gray. In 2009, the former fashion editor went to the hospital for reconstructive surgery following a double mastectomy. Gray's insurance company, Aetna, approved payment. But when Gray got the bill, she found the insurance giant paid only $3,000 of the $32,000 charge. Gray asked Aetna to reconsider. They refused [source: Weintraub].
Believing she was wronged, Gray, who first learned she had cancer at the age of 46, started writing letters to various state officials including then Connecticut Gov. Jodi Rell. She also wrote to the CEO of Aetna. Ultimately, the Hartford-based insurer reversed its decision and paid the entire invoice [source: Weintraub].
Gray's win might have been sweet -- one for the regular guy -- but it was one of only a handful of victories consumers see each year. According to the American Medical Association, one in five medical claims in 2010 was improperly processed by health insurers, and among insurers, claim denial rates varied widely from .7 to 4.5 percent [source: American Medical Association].
Anyone who has battled an insurance company knows all about angst and frustration. It's the classic story of David and Goliath. The phone calls, the letter writing, the complaining. If Gray's story offers any lessons, they are to be persistent, never take no for an answer and always ask questions. According to one study, 66 percent of people who negotiated medical bills with their doctors succeeded. The study also said that another 70 percent won after haggling with their hospitals [source: Kotzen].
Every day thousands of Americans struggle to pay their medical bills. While throwing the statements into the trash might give you a bit of self satisfaction, it won't solve the problem. Experts say you need to talk to your insurance company and negotiate if you feel like you didn't receive the proper coverage. The most important thing is to do your homework and be patient -- very patient. Don't expect bargaining to be a breeze. Be proactive. Don't wait for the bills to start coming in: Negotiate early.
Go to the next page to find the 10 best ways to negotiate a medical bill.
Pay Cash Upfront
Whether you're negotiating with a used car dealer, carpenter or a cardiologist, nothing says lower my bill better than "I'd like to pay now with cash." Most doctors pay thousands of dollars each year to strong-arm patients into paying their bills. In many cases they have to hire attorneys or collections agencies to recoup the unpaid money. Doctors also don't like patients who pay by credit card, because their processing fees can be huge. Receiving cash saves the doctor a lot of time and trouble. When someone pays cash up front or within 30 days, chances are they can negotiate a better deal, perhaps up to a 40 percent discount [source: Lee and Brody].
Explore Low-cost Treatments
Buying generic drugs instead of brand names can save patients a lot of money. The same can be said of low-cost medical treatments. While 80 percent of doctors will prescribe generic medication to save patients cash, not nearly as many will suggest low-cost treatments. According to the Center for Health System Change and the University of Chicago, only about half -- 51 percent -- of the doctors surveyed told their patients that lower-cost diagnostic testing was available, while just 40 percent recommended outpatient treatment rather than hospitalization [source: U.S. News & World Report]. The lesson here is to speak up and ask your doctor if low-cost treatments are available.
Make Friends with the Billing Department
Grandma always said you'll attract more bees with honey than vinegar. You should apply her wisdom when it comes to dealing with your insurance company and doctor. When you first get your doctor's bill and you don't like what you see, restrain yourself from lashing out against some poor customer service representative. Before you make that call, take a breath and simmer down. If you're nice, you can probably negotiate a suitable compromise. First, speak to the office manager directly. The office manager can point you to the right person. Get that person's name and talk to them every time you have a query. If you find a billing mistake, calmly bring that error to the attention of your new friend [source: Brandon]. Don't be afraid to flatter, joke or even schmooze with your new-found buddy. It could be worth a few dollars in your pocket.
Scrutinize Your Bill
Don't take your hospital bill as gospel. Billing departments make errors. Let's look at the case of Ron and Marilyn Hess, of Homer, Alaska. The couple was saddled with a $10,000 hospital bill following Marilyn's $45,000 appendectomy. The couple, thinking their insurance should have paid for the entire procedure, asked for an itemized bill. They looked at every line and found procedures that weren't performed. It took 18 months and the help of a health-care advocate, but Ron and Marilyn triumphed. They didn't have to pay a dime [source: MSNBC].
Billing errors are very common. A doctor may request a procedure or a medication, than cancel it. Yet, the treatment still shows up on the bill. There might be a misplaced decimal point, or an extra zero, which can add hundreds and even thousands of dollars to your bill. Check the dates, too. You might not have been in the hospital or doctor's office on the day the procedure was allegedly completed [source: Brody]. And unfortunately, there are unscrupulous health care providers out to defraud you and the insurance company. The National Health Care Anti-Fraud Association estimates that $68 billion -- or 3 percent of all health-care spending -- is fraudulent [source: Consumer Reports].
Negotiate a Rate
If you want to be proactive, ask the billing department what their hospital or clinic charges for a medical procedure. Be specific. For example, ask what the charge will be for the radiologist or anesthesiologist. Be persistent. Once you find out the cost, ask the billing department or your doctor for a discount. Some people have reduced their payments by as much as 40 percent by negotiating a rate. Many health-care providers will also offer discounts to patients who are facing hefty medical bills [source: Andrews]. It doesn't hurt to ask. Keep in mind that many hospitals have more than a dozen rates for the same procedure, regardless of whether Medicare, Medicaid or a private insurer is paying [source: Alderman].
Come to Terms on a Payment Plan
Keep this in mind when you begin to haggle: Hospitals, doctors, medical labs and other health care providers don't want to turn your bill over to a collection agency, or write it off completely. It costs them time and money. That's why it's in their best interest to agree on a payment plan with you. In negotiating a plan, consider some of these tips that work well, whether you're paying down your deductible or paying your doctor.
- Decided on a specific time when the bill needs to be paid in full, perhaps in three to six months. It's important the timeframe be comfortable for you.
- Make sure you can afford the monthly payment.
- Don't neglect other bills.
- You might need help in paying down your medical debt. If you can, go to the bank and apply for a personal loan or a line of credit. The interest rates will be much cheaper than putting the bill on a credit card.
- Pay your bill each month in a timely manner and stick to the payment plan.
- Make sure you get receipts from the billing department.
Hire a Health Care Advocate
When it comes to medical bills, hospitals, doctors and insurance companies have a team of people working for them. Who's on your side? The health care advocate, that's who. Health care advocates know the ins and outs of the industry. They also know the law. They will scrutinize your medical bills and look at your coverage with the sole purpose of finding mistakes and other savings. Many times, patients don't know they are entitled to certain benefits. Advocates will also tell you what the best courses of action are, such as deciding to resolve a dispute using an appeals process. They'll battle on your behalf. Some advocates charge about $50 to $175 an hour to help you. Others earn a commission of 15 to 35 percent on the amount they save you on your bill, and only get paid if they are successful [source: Consumer Reports].
Some state governments have people whose sole job is to help you deal with your medical bills and the insurance companies. In Connecticut, for example, the Office of The Health Care Advocate provides services at no charge to people who have been denied coverage or a claim by their insurer [source: Connecticut Office of the Health Care Advocate].
Make Sure Your Health Plan Pays
We've all been there. The medical bill comes in the mail and we write a check without really studying the statement. Sometimes, though, insurance companies don't pay their fair share. That's why it's important to scrutinize your bill. If you disagree with your insurer's decision, make sure you contest it through the normal appeals process. Sometimes insurance companies can be stubborn, so you might have to escalate the matter. If push comes to shove, contact your state representatives who can provide you with information on how to resolve the matter. They may steer you to the state attorney general, the state insurance department or a health care advocate office.
Under the new health care reform law, insurance companies are mandated to implement an appeals process if a claim is disputed. If the patient is still not satisfied with the outcome of the internal review, he can ask for an independent review of the coverage. Decisions to rescind coverage are also subject to appeal [source: Jost].
Negotiate Medicare Rates
Did you know your insurance company generally pays higher fees than Medicare for the exact same procedures? It's true. But you don't have to be a senior citizen to enjoy the lower rates of Medicare, the federally-funded health care plan that pays for about half of all medical costs for those 65 and older. Because Medicare pays doctors, hospitals and other health-care providers the lowest fees, you can use those fees as a starting point to negotiate a lower medical bill [source: Alderman]. One way to find those fees is to visit the U.S. Department of Health & Human Services Medicare Web site. It's relatively simple. All you have to do is type in your ZIP code and begin comparing hospital rates.
Compare Hospital Costs
It's normal to shop around and compare costs when you're buying a car. When you renovate your kitchen, you get estimates from more than one contractor. Shopping around for the best surgical procedure is the same thing. Being proactive and comparing costs can save you oodles of cash before you go to the hospital. The best time to negotiate prices is before you get the treatment. Make sure you know the CPT code for the procedure you are seeking. CPT means "current procedural terminology." In simple terms, CPT is the billing code hospitals use for each procedure. Knowing the code will make it easier for you to get quotes from various hospitals and doctors. Your physician can supply you with the codes [source: MSN]. Just keep in mind, if you choose a hospital where your preferred physician does not have practicing privileges, he may not be able to perform your procedure.
Hospitals use another type of billing code called the Healthcare Common Procedural Coding System. The HCPCS number is usually five digits long and may have some letters. Hospitals use the code for supplies, medical equipment and other products [source: Consumer Reports].
You've lost your job and gotten behind with your rent. You know your landlord is looking for you. What's the best way to avoid eviction?
- Alderman, Lesley. "Bargaining Down the Medical Bills." The New York Times. Mar. 13, 2009. (Jan., 2011). http://www.nytimes.com/2009/03/14/health/14patient.html
- American Medical Association. "New AMA Health Insurer Report Card Finds Need for More Accuracy." June 14, 2010. (Jan., 2011). http://www.ama-assn.org/ama/pub/news/news/2010-report-card.shtml
- Andrews, Michelle. "4 Ways to Save on Your Medical Bills." U.S. News & World Report. Aug. 21, 2008. (Jan., 2011). http://health.usnews.com/health-news/blogs/on-health-and-money/2008/08/21/4-ways-to-save-on-your-medical-bills.html
- Bankrate.com. "10 ways to cut your medical bill." MSN.com. (Jan., 2011). http://articles.moneycentral.msn.com/Insurance/InsureYourHealth/10-ways-to-cut-your-medical-bills.aspx
- Brandon, Emily. "5 Ways to Lower Your Medical Bills." U.S. News & World Report. Nov. 29, 2007. (Jan., 2011). http://money.usnews.com/money/personal-finance/articles/2007/11/29/5-ways-to-lower-your-medical-bills.html
- Brody, Jane E. "Put Your Hospital Bills Under a Microscope." The New York Times. Sept. 13, 2010. (Jan., 2011). http://www.nytimes.com/2010/09/14/health/14brod.html?_r=3
- Consumer Reports. "Check medical bills for errors." Aug., 2009. (Jan., 2011). http://www.consumerreports.org/cro/money/personal-investing/check-medical-bills-for-errors/overview/
- CT.gov. "Office of the Health Care Advocate." (Jan., 2011).http://www.ct.gov/oha/site/default.asp
- Grim, Ryan. "Health Insurance Profits Soar, Dem Calls For Rebates." Huffington Post. Nov. 10, 2010. (Jan. 2011). http://www.huffingtonpost.com/2010/11/10/health-insurance-profits-_n_781636.html
- Jost, Timothy. "Implementing Health Reform: The Appeals Process." Health Affairs.org. July 25, 2010. (Jan., 2011). http://healthaffairs.org/blog/2010/07/25/implementing-health-reform-the-appeals-process/
- Kaiser Family Foundation. "U.S. Health Care Costs." March, 2010. (Jan., 2011). http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx
- Kotzen, Josh. "A Little Haggling Could Mean Big Savings on Med Bills." ABC News. March 29, 2008. (Jan., 2011). http://abcnews.go.com/GMA/story?id=4545067&page=1
- Lee, Jeannie. "Slash Your Medical Bills: 7 Ways to Haggle." CBS Money Watch. Nov., 4, 2009. (Jan., 2011). http://moneywatch.bnet.com/saving-money/article/slash-your-medical-bills-7-ways-to-haggle/360623/
- MSNBC.com. "Medical-billing errors becoming more common." Oct. 29, 2007. (Jan., 2011). http://www.msnbc.msn.com/id/21527433/ns/health-health_care/
- U.S. News & World Report. "5 tips for haggling over medical bills." MSN.com. Jan. 29, 2008. (Jan., 2011). http://articles.moneycentral.msn.com/Insurance/InsureYourHealth/5TipsForHagglingOverMedicalBills.aspx
- Weintraub, Arlene. "How to fight a denied health claim -- and win." Reuters. Nov., 17, 2010. (Jan., 2011). http://blogs.reuters.com/prism-money/2010/11/17/how-to-fight-a-denied-health-claim-and-win/