In 2022, Dollar For built and ran a pilot program to learn everything we could about medical debt negotiation for patients who do not qualify for charity care. While we are no longer offering this service, we have built a library of tips we learned along the way. Check out our tips and advice on how you can work to lower your hospital bill.
Make sure you are responsible for this bill
In some cases, you may get billed for care at a hospital that you should not have to pay. Here are some situations where that happens and what to do.
Check your health insurance
If you have health insurance, your first step is to make sure it was correctly applied to your bill.
Confirm with the hospital they have your correct insurance information. Occasionally, hospitals make a mistake when typing in your insurance ID number, and the bill will not process through your insurance correctly.
Next, verify that your insurance paid its portion. When a claim is submitted by a provider, your insurance company should send you an “Explanation of Benefits,” or EOB, that shows how much they paid towards the claim.
If your insurance denies your claim, call your insurance broker to get help submitting an appeal. If you do not receive an Explanation of Benefits or you think the insurance is not covering what it should, your state likely has a process to appeal the coverage decision. You can search your state for Consumer Assistance Programs to help you with your claim. You can also look into resources at the Consumer Financial Protection Bureau.
Ask about hardship programs
There are often hardship programs if your bill is a large percentage of your annual income. Call the hospital, explain your financial situation, and ask if they have any programs that can help. Tell them about your total bills from this hospital and other providers. If they say they will consider an application from you, Dollar For can help you apply — for free. Get started here.
Make sure your medical bill is accurate
Just because the medical provider puts something in a bill, does not necessarily mean you owe it. Many bills have errors in them.
Sometimes, bills include multiple charges for the same thing — or the hospital charges you for more complex care than you received. This dishonest practice is known as “upcoding.”
Even a bill with no errors or upcodes can contain unreasonable charges. Hospitals get paid a different amount depending on who is paying. When paid by the government, a hospital generally gets paid about what they spend (or a bit less). When paid through insurance, a provider usually gets two or three times what they spend.
However, if you are uninsured, your bill probably could be as much as four or six times what the provider spent. Hospitals have what is called a “chargemaster,” which is a list of their “sticker prices” for different medical services or items sold. These prices are highly inflated — and you can and should demand that they be lowered. Just because a hospital puts a price on something does not mean that you have to pay that amount.
If you think that you were billed incorrectly, upcoded, or price gouged, tell the hospital:
“I am disputing this bill. Please send me an itemized statement.”
Then, fight for corrections to the bill. You can use resources like Turquoise Health to learn what other providers in your area would accept for the same service. Show those numbers to the hospital and ask them to lower the bill to that amount.
Negotiate down the final price
Most hospitals and debt collectors will work with you to reduce the price. To them, getting paid a smaller amount can be worth more than spending time chasing you to get you to pay. They will frequently try to steer you toward a payment plan.
Here are some tips on successful negotiations:
- Write a “hardship letter” to the hospital explaining why you are unable to pay the debt.
- Call the billing office and ask them to work with you on the bill amount. Be calm, nice, and honest when on the phone! You want to get the billing representative on your team so that they can help you reduce that bill. If your bill is with a debt collector, use our proven conversation script.
- If you have some savings that you can use to pay the bill, ask the hospital or debt collector what they would accept as a full settlement if you made a one-time payment. Do not be afraid to push back or counter-offer. Remember, regardless of what they tell you — this is a negotiation!
- If you can’t afford a lump-sum payment, ask for a payment plan. Request a copy of the payment plan policy. Then tell them what you can reasonably afford to pay each month. It can also be helpful to show them proof of other expenses you have.
A bit about your credit score
The credit reporting bureaus recently made some changes to the way that they report medical debt. This means medical bills will likely have less impact on your credit score than most other types of debt. Here is what you need to know:
- Medical debt can not be reported to credit bureaus until 1 year after the initial bill.
- If you pay off a medical bill that has already been reported to a credit bureau, it will be removed from your credit report.
- Starting on January 1, 2023, medical debt under $500 is no longer reported to the major credit bureaus.
Special tips for dealing with debt collectors
The Fair Debt Collection Practices Act (FDCPA) gives you rights when dealing with a collection agency or other third-party debt collectors. Here are a few important ones:
- A debt collector cannot contact you at an “unusual time.” This is generally considered anytime before 8 am or after 9 pm in your time zone. They also cannot communicate with you in a place that is inconvenient.
- If you have an attorney helping you with your bill, write a letter to the debt collector with the attorney’s name and contact information. If a debt collector knows you have a lawyer and can easily get your attorney’s contact information, then they cannot contact you and must go through your attorney.
- If you tell the debt collector in writing to stop contacting you, they are only allowed to contact you in the future to tell you if they plan to pursue a certain remedy (like filing a lawsuit against you). Please note that this will not affect whether you owe the debt or not.
- A debt collector cannot contact other people in your life, including your boss and your friends. They can only contact you, your attorney, a consumer reporting agency, the original creditor, the creditor’s attorney, or their attorney about the debt.
- The first time a debt collector contacts you, they have to tell you the amount you owe, who owns the debt, and that you have 30 days to dispute the debt in writing.
- If you dispute the debt in writing within 30 days, the debt collector must send you verification of the debt or a judgment (if one exists). The US Consumer Financial Protection Bureau has handy dispute template letters here.
- A debt collector may not harass, oppress, or abuse you. They can’t threaten you with violence or damage to your property. They can’t use abusive or profane language with you or call you repeatedly to annoy, abuse, or harass you. They also cannot publish publicly that you refused to pay (except for reporting to a consumer reporting agency) or try to coerce you into paying by advertising to sell your debt.
- A debt collector can’t lie or try to deceive you. For example, they can’t pretend to be someone they are not, misrepresent the bill amount, pretend that you could be arrested or jailed for nonpayment when you cannot, pretend that you have committed some sort of crime, or threaten to falsely report the debt to a consumer reporting agency.
- A debt collector may only charge interest, fees, or expenses in your agreement with the medical provider or otherwise authorized by law.
- A debt collector cannot threaten to repossess your property when they legally may not.
- A debt collector may not contact you by postcard.
- If you have multiple debts with a collector, they must apply payments you make to the debts you tell them to.
Also, your state may give you additional rights. The FDCPA and most similar state laws will require the creditor to pay your attorney’s fees if you file a suit against them. Many attorneys who represent patients who have medical debt will not charge the patient but will instead be paid by the collector.
If you think your rights have been violated or you’re being sued, try searching the internet for “FDCPA lawyer near me,” “debt defense lawyer near me,” or “consumer protection lawyer near me.” If lawyers say they will work on a “contingency” basis, this means that you will not have to pay their fees — the collector will have to if you win. You can search for lawyers here.