How To Negotiate Medical Bills In Collections


A medical emergency can cost a lot of money.

Even routine treatment can be expensive.

And if you have excellent health insurance, a medical emergency could still result in you paying thousands of dollars in hospital expenditures.

The truth is that unforeseen medical expenses may strain any budget.

The good news is that most medical bills allow you some wiggle room.

So if you are facing medical debt, you have options.

I’ll walk you through how to keep medical costs low before getting treatment and negotiate medical bills already in collections.

In the end, you will have a solid plan for saving money and avoiding destroying your finances.

How To Negotiate Medical Bills In Collections

Steps To Do Before Medical Debt Goes To A Debt Collection Agency

negotiate medical bills in collections

What should you do before a medical bill goes to a collection agency?

Here are the steps you should take to keep your finances in order.

It is essential to try to find a solution to paying medical debt before it goes to collections so it doesn’t show up on your credit report and lowers your credit score.

#1. Negotiate Before Treatment

Before approving medical care, get a price estimate from your health care provider.

Ask what the cost is for the procedure, and then ask if there are any possible discounts from the billing department.

The office could be open to working with you in some circumstances.

If you are experiencing financial hardship, be sure to let them know.

Even if they don’t lower their pricing, they might be able to come up with a payment schedule that works for you.

If you go the payment plan route, be sure you understand the repayment terms and that you can handle the payments.

In the case of hardship, you will have to demonstrate financial hardship in most instances.

Of course, there are times when this is not feasible because of a serious medical issue.

In this case, you will have to negotiate after the fact.

#2. Compare Prices

If you have the time to compare prices for medical care, you could be surprised at what you find.

You can compare rates between providers based on your insurance provider.

Other times you might get a significant discount for paying cash instead of going through your insurance company.

Take the time to call your hospital and outpatient clinics to see what they charge for the service you need.

You’ll be surprised that the prices can vary wildly.

At the very least, look into a price comparison service like Turquoise.

#3. Know Your Insurance Policy In Detail

You should know what your insurance covers and what it does not.

This information can help ensure that the charges for treatment are valid.

It can also result in significant savings if you point out any covered costs in your bill for which your health insurance is responsible.

A Summary of Benefits and Coverage can be obtained from your insurer if you need clarification on what your insurance covers.

Your coverage’s specifics will be outlined in this document.

#4. Ask For A Discount

If you already had treatment and now have debt, you can still ask for a discount on a medical bill.

A doctor’s office or hospital would much rather get paid than deal with sending your medical debt to collections.

So give the billing department a call and see if they would be willing to work with you.

#5. Ask For A Payment Plan

You can also ask for a payment plan if you need to.

You can avoid a negative impact on your credit score by keeping the debt out of collections with a payment agreement.

The majority of providers offer payment plans, which is fantastic news.

#6. Seek Financial Assistance Programs

Financial help options may be available depending on your area and medical provider.

An aid program might be of assistance if you really can’t afford the payment.

You can find various assistance programs through your state or local government, hospitals, and nonprofit organizations.

Some programs help with a specific disease or health condition.

Others might be for low-income people.

You can even find nonprofit hospitals and clinics to keep costs low in the first place.

No matter your situation, a program is likely out there that can help you.

#7. Review Your Medical Bill For Billing Errors

Make sure you ask for an itemized bill and don’t simply go off a summary.

You want to ensure you received the treatment on your bill.

In many cases, treatments have a billing code, which the billing department types into the bill.

There are many instances of people getting charged for treatment they never received.

And most times, they don’t know they were overpaying because they didn’t review the bill or ask for an itemized bill.

In fact, up to 80% of medical bills have errors on them, meaning you are probably paying for services you never received.

#8. Hire A Medical Bill Advocate

Even if you get an itemized bill, you might not know what you are looking at.

This is where medical bill advocates come in.

They understand the structure of medical bills and can identify errors much easier.

While there is a cost to hiring this person, free options exist.

You can start the process by talking to your insurance company.

In some cases, they have advocates on staff to help you.

From there, ask your human resources department.

More employers are offering this service as part of employee benefits.

#9. Consider A Medical Credit Card

A medical credit card is like a traditional credit card, except that the card can only be used for medical procedures.

Also, only some procedures can be charged to your card.

The benefit of medical credit cards is that most offer 0% interest for some time.

Understand this is deferred interest, so you need to pay off the balance within the promotion period.

Otherwise, you will pay interest on the original balance, not your remaining balance.

Using a medical credit card can save you thousands over another payment option that charges interest.

#10. Don’t Transfer Medical Debt

One significant mistake people make with expensive medical bills is to transfer the balance to credit cards or even personal loans.

This is a mistake because medical costs aren’t charged interest, even if you are not paying.

Sometimes, the provider may charge you a late fee, but they won’t charge you monthly interest.

When you transfer your debt to a personal loan or a credit card, you will pay the principal and interest every month, making the total cost much higher.

How To Negotiate Medical Bills Already In Collections

save money on healthcare costs

Do you have any options if your medical debt is already in collections?

The good news is there are ways to settle a medical debt in collections.

#1. Know Your State’s Statute Of Limitations

Spend time learning about your legal rights if a medical bill is with a collections agency.

Find out exactly what your state’s statute of limitations requirements are.

The statute of limitations regulations place a deadline on when the bill can be paid.

You might no longer be accountable for repaying your debt if it has gone unpaid for a specified period.

Understand that if you get phone calls from collection agencies and make a payment, the statute of limitations starts again.

#2. Demonstrate Hardship

The key to settling medical debt in collections is to prove hardship.

Financial hardship is the state of being on the verge of filing for bankruptcy due to this medical bill and other bills.

A debt collector may receive no payment at all if you declare bankruptcy.

Since borrowers who convincingly show financial hardship can negotiate a settlement, many debt collectors are eager to do so.

You can demonstrate how this medical bill affects you by presenting evidence of your most recent income and bank statements.

The figures will show whether you’re in a position to make regular payments or not.

#3. Opt For Medical Bill Forgiveness

Your creditors might agree to settle medical debt if you have unpaid past-due medical expenses.

This would enable you to pay a smaller amount to satisfy the debt, with the remaining balance forgiven.

How To Get Your Medical Bills Forgiven

Did you know you can get medical bills in collections forgiven?

Debt collectors might be open to accepting an offer, whether or not you can prove that you need help.

Depending on the circumstances, they might be willing to accept a third or even half of what you owe.

When you start negotiating, know there will be some back and forth before you get to a final number.

Also, ensure you can pay the bill immediately to eliminate this problem.

Make sure the debt collector agrees to sign a binding document indicating payment for the total amount if they accept your offer.

They might come back later for the unpaid medical debt if you don’t have this document.

How Much Should You Offer To Settle Medical Bills In Collections?

A debt collector will decide on a case-by-case basis how much money to settle for.

However, if you offer them a lump sum payment instead of a series of payments over time, they are frequently more likely to settle.

You should be able to save at least 25% of what you owe.

If the debt collectors are confident that they can pay the amount immediately, they can be more open to accepting.

Typically, debt collectors settle for 48% of your total medical debt.

If you work with an agency, you may be able to negotiate for a better price than you would on your own.

What Happens If A Debt Collector Refuses To Negotiate Your Medical Bills?

Below are a few things you can do if the debt collector won’t negotiate medical debt.

#1. You Have No Option But To Accept It

The Federal Trade Commission states that a creditor is not required to enter into settlement talks with debtors.

Collection agencies are subject to the same laws.

Suppose your creditor or collection agency decides to negotiate with you.

In that case, they will do so at their discretion, which also means they are free to reject your settlement proposal and demand full payment of the amount.

If the collection agency doesn’t negotiate a settlement, several states will let them add fees and interest to the initial debt level.

In this case, you would be liable for paying the additional sum.

#2. Consider Revising Your Offer

It’s important to note that most collection companies will accept a debt settlement offer if they deem it reasonable.

If your agency rejects your initial offer, you might only need to modify it and suggest a more attractive figure.

Consider making a new offer at 60% if, for instance, your initial proposal was for 50% of the total debt amount.

#3. Speak To The Provider Who Billed You

If your attempts to negotiate with debt collectors fail consider talking to your healthcare provider.

Ask them if they are open to negotiating after explaining that you wish to find a method to clear the debt.

The healthcare provider can accept your initial offer, agree on a different price, or flatly reject you and send you back to the collection agency.

#4. It’s Only About The Money

It’s crucial to remember that your healthcare providers don’t care about your life or the events that led you to where you are now when dealing with them.

Both them and the collectors have an obligation to recover the money you owe by following legal channels.

Your responsibility is to uphold your financial commitments while safeguarding your interests.

In other words, trying to persuade them with depressing tales of what went wrong will be ineffective.

Instead, concentrate on communicating with them using the language of money.

#5. Seek Professional Help

Although you understand the most about your debt and financial circumstances, debt relief experts may be able to assist you.

They can help with negotiating a settlement in a way that will speak to your health provider, health insurance, or the collectors on a different level.

An effective debt settlement company has considerable experience and expertise in dealing with debt collectors.

They can assist you in reevaluating your options from a fresh perspective and might even suggest solutions to your debt issues that you hadn’t thought of.

Additionally, if you decide to negotiate medical debts with collectors, dealing with a debt settlement firm would guarantee that the negotiations were handled properly.

Final Thoughts

There is how to negotiate medical bills in collections.

You can reduce the price of your treatment by thousands of dollars by negotiating medical bills.

Even if your treatment has started or is complete, there is still the option to negotiate the cost.

If your medical debt is already in collections, you still have options.

You can work with your medical providers and offer to make a partial payment or be placed on a plan so you can start making payments you can afford.

Always remember you have options.

Make sure you understand your legal rights and then make phone calls to find a solution with your service provider.

Author Bio: This guest post was written by Lyle Solomon. Lyle has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in California. He has contributed to publications such as Entrepreneur, All Business, US Chamber, Finance Magnates, Next Avenue, and many more.

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