How to Negotiate Medical Bills, Step-by-Step

We all know medical bills can be expensive. You've probably been hit by a mild shock at least once when looking at the total amount due.

Plenty of viable options exist to lower the bill or erase it entirely. Reducing your medical bills is easier than you think. 

But how should you go about negotiating medical bills? What steps should you follow? And what are the “magic words” to say to the hospital billing department? 

Find out as we cover seven steps for managing, lowering, and possibly even eliminating your medical bill entirely. 

1. Request an itemized bill

Imagine getting your receipt at Trader Joe’s and it just says: “FOOD – $89.23” on it. Or you drop your car at the mechanic, and when you pick it up, they give you a bill that reads “WE FIXED YOUR CAR – $1,619.79.” 

In both cases, you’d probably want something much more specific. That should always be your first reaction to your medical bill, too. Because for some reason, it’s common practice for medical billing departments to bucket individual charges together into “summary charges” like “Pharmacy” and “Special Services.” 

Source: Sharp HealthCare

Summary of charges

These vague and unhelpful “summary charges” may save on paper, but they also make it impossible to see what you’re really being billed for — and whether or not you’re being charged for something by mistake. 

And statistically speaking, you probably are. A 2011 study by the Access Project found that up to 80% of medical bills have errors on them — things like duplicate charges, incorrect billing codes, or patients being charged for services and procedures they never even received.

It’s best to call the hospital billing department and ask for an itemized bill with billing codes attached. You should then receive something way more detailed and helpful like this: 

Source: MyOPD

Granted, much of a medical bill will still read like gibberish to anyone without a medical background. But you don’t need an MD to scan for errors like duplicate codes, Bed Charges for days you weren’t even a patient, and other obvious mistakes that can take thousands off your medical costs. 

You should also know that seeing your own billing information is a federally protected right under HIPAA law 45 CFR § 164.524. Despite this, a 2023 study by Goodbill found that nearly 60% of hospitals didn’t honor patients’ requests to see their own billing information. So you may have to be persistent, and politely (but firmly) remind the billing department of your rights. 

2. Request an Explanation of Benefits (EOB) from your insurance

If you have health insurance, your next step is to check that your insurance company got it right, too. Tedious, we know, but it could easily save you enough money to make it worth your time. 

In a typical billing situation, healthcare providers will bill your insurance company first. Your insurance company will then cover some or all of the charges and send the rest back to your provider, who then sends the leftover balance to you. 

In the end, you’ll get a bill showing: 

1. Your charges
2. What is your insurance covered?
3. What’s left for you to cover?

Your job is to make sure your insurance company covers everything they were supposed to cover —in the right amounts. 

Explanation of benefits

To do this, you’ll need to have both your itemized bill and your insurance plan’s explanation of benefits (EOB). The latter document summarizes everything your health insurance company does and doesn’t cover under your plan, including things like your copays, deductibles, and more. 

Insurance providers typically send paper copies of your EOB after signup. But if you’ve lost it, you can request another or possibly find a digital version in your online account. 

Just this year, I’ve found two errors doing this. In one case, my provider charged for a Level 5 visit while my insurance paid for a Level 4 visit, leaving me with a much bigger medical bill by mistake. In another instance, my provider didn’t apply one $500 physical therapy visit to my annual deductible so my next bill was erroneously $500 higher. 

Even if you don’t find any errors, a simple refresher of your policy can provide peace of mind and perhaps point out benefits you forgot to use, like discounted gym memberships. 

3. Ask the hospital for their Financial Assistance Policy

As part of a lesser-known clause in the Affordable Care Act, all hospitals with 501(c)(3) status are required to provide free or discounted care to qualifying patients, also known as “charity care.” Many for-profit hospitals offer financial assistance programs as well. 

In either case, you can often find your provider’s written Financial Assistance Policy (FAP) by simply Googling or asking the billing team. 

In order to qualify for financial assistance with a non-profit hospital, you need to be uninsured and makeup below 400% of the current year’s national poverty level. For a one-person household in 2023, that number would be $58,320. 

For-profit hospitals may have a lower threshold (which, to be clear, excludes more patients). Kaiser Permanente, for example, set theirs at 300%. 

If you think you may qualify for assistance with hospital bills, it’s certainly worth having another transparent conversation with billing and filling out an application if you're eligible. 

4. Ask for a reduced fee

Even if you don’t qualify for financial assistance, some hospitals may still lower medical bills. That is if you can demonstrate that the outstanding balance would cause you financial hardship. 

For example, you might make $60,000 — which is right outside the boundary for financial assistance — but your rent and student loans already gobble up most of your paycheck, and you have the paperwork to prove it. 

To find out if you might qualify for this “hidden” financial assistance, simply ask billing on the phone whether they might offer a “reduced fee for financial hardship,” and be sure to mention that you have the tax returns, pay stubs, and lease agreements to back up your claims. They may not, but it’s certainly worth the ask. 

5. See if you qualify for Medicaid

Needless to say, qualifying for Medicaid could seriously slash your current and future medical bills. 

For the uninitiated, Medicare and Medicaid are different. Medicare is federally subsidized health insurance for folks aged 65 and over. 

Medicaid, on the other hand, is for folks with disabilities. Depending on the state, you may qualify for Medicaid if: 

• You think you are pregnant
• You’re a child or teenager
• You’re in foster care
• You’re legally blind
• You have a disability
• You need nursing home care
• You and your family are on Supplemental Security Income (SSI) or are low income in general

To find out more details, visit your state’s official Medicaid page. Since there’s a boatload of Medicare/Medicaid-related scams out there, be sure that any application you fill out comes directly from a trustworthy source ideally ending in .gov, such as medicaid.georgia.gov.

6. Hop on a payment plan 

Most medical billing departments won’t expect you to pay giant medical bills in full right away. In fact, bills of all sizes often come with payment plan options listed right on the bill itself. And in many cases, you can even pay off your debt interest-free. 

That’s a really big deal because it means you don’t have to take out a high-interest personal loan or put your medical debt on your credit card. In either case, you’ll be paying between 9% and 29% APR, which could lead you spiraling into endless medical debt. 

Instead, if the hospital offers a 0% interest payment plan, take it. You’ll get extra time to pay off your hospital bills without interest accruing. As long as you make regular on-time payments, it may even improve your credit score. 

7. Next time, ask for a “good faith estimate” 

Have you ever been told that “we don’t provide pricing upfront,” only to be blindsided by a huge medical bill later? 

There’s a way to prevent that from ever happening again. Better still, uttering the magic words before your visit may even save you thousands of dollars when your bill arrives.

Those magic words are: “Could you please provide me with a good faith estimate?” 

While it may sound like the medical equivalent of a wink and a how ‘bout a good guy discount?  Good Faith Estimates are actually a federally protected right. Thanks to the No Surprises Act (effective January 1, 2022), a patient who requests a Good Faith Estimate prior to receiving medical care is entitled to a sincere, best-guess estimate of how much their visit will cost. 

Then, if you get the bill and it’s more than $400 higher than your Good Faith Estimate, you can dispute it through the patient-provider dispute resolution process. But providers don’t like being reported to the Feds, so you may see faster results by simply calling billing, sending them a copy of your Good Faith Estimate, and asking for a price adjustment. 

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