Medical debt makes up the largest portion of consumer debt in collections, which can of course negatively affect your credit score. But most people don't know is that in some cases medical bills can be negotiated.
Here are a few tips to help you successfully negotiate medical debt:
Check for Accuracy
When you receive your medical bill:
- Check the dates of services
- Look for overcharges and duplications
- Look for charges for care or services you didn’t receive
- Make sure charges weren’t added after treatment concluded
Erroneous billing practices and even fraud contribute to overpayments. Studies show that a large portion of consumers may be overpaying on medical debts.
If you find any errors on your bill, contact the billing staff immediately and inform them of the error so that it can be fixed promptly. After the adjustment has been made make sure you request to have an itemized statement forwarded to you. Despite the fact that you may receive a summary bill that lists the total amount owed, you’re entitled to an itemized statement.
If you think that you were wrongly charged, file an appeal to have the charges reassessed. If the findings are in your favor, you may be eligible for reimbursement if you have already made payments.
Keep Good Records
Make sure that you keep your bills and insurance paperwork organized.
Take down the names of representatives you speak to on the phone and be sure to get their name and ID number so you can follow up within two to three weeks of the initial call. Make sure you also do this when communicating with representatives from your insurance company. If it becomes a your word against theirs situation having this information will make your case stronger.
Negotiating medical debt can be an intimidating process but remain friendly and be honest about your hardship and the factors preventing you from paying the bill in full. If you feel as though things aren’t going smoothly or you aren’t being heard, don’t be afraid to ask for a supervisor or manager. Continue until you find someone who can help without being too threatening or harsh.
- The first thing you should do is attempt to reduce the amount owed. Find out if they are willing to waive any unnecessary fees.
- Ask for a prompt pay discount. Hospital billing departments and providers are eager to collect and get charges of their books so start off with an aggressive offer when paying a lump sum, for example, suggesting to pay 30% of the bill to have the remainder written off. Even if your initial offer is turned down, the provider may counter with an offer that is feasible. The only disadvantage with these options is that it generally requires you to pay your bill in full within a certain time period. This could be difficult with larger amounts.
- If you don’t have the funds to pay in full, find out if your provider is willing to offer a payment plan. If they agree, depending on the plan offered by your provider, you will most likely be responsible for monthly payments of a certain amount with the possibility of accumulating additional fees and/or interest charges. Try to work out an interest free arrangement.
- If these attempts are unsuccessful consider hiring a medical billing advocate to stop the clock from ticking. This person’s job is to save patients money and work out a solution between them and the provider. The advocate understands the actual costs of procedures and is able to leverage competitor pricing and Medicare to lower bills overall.
- You could go the crowdfunding route, but don’t anticipate it to complete save you from your debt. Several people have found success covering medical bills by using sites such as GoFundMe to fundraise for their medical bills. Even if you don’t successfully raise enough money to cover all of your medical expenses, everything counts.
What Happens If You Aren’t Able To Negotiate and Your Medical Debt Goes to Collections
In most cases, once an account has been delinquent for several months the medical debt will be sold to a collection agency.
Allowing your medical debt to go into collections will most likely harm your credit score. The debt will appear on your credit report as unpaid and remain on your credit report for up to seven years even if you pay the bill in full after it was placed on your report. Some companies will accept a pay for delete offer. This is one of the only ways to have the debt removed from your credit report. A pay for delete occurs when a company agrees to stop reporting a negative item on your credit report in exchange for immediate payment of the debt.
Although the collection process can be intimidating, The Fair Debt Collection Practices Act (FDCPA) outlines specific regulations that must be followed by medical debt collectors. If you believe a debt collector has violated the law, take action to report unfair practices within one year from the alleged violation however, keep in mind that the law does not apply to the original creditor.
It's okay to trust your gut if you get a phone call about a debt in collections that you don't think is yours. It's within your rights to get a collection agency to verify that the debt is indeed yours before you proceed. Never divulge personal information over the phone, especially not until you get written verification that the debt belongs to you. Learn more about how to verify a debt in collections here.
Preventing Medical Debt
If you have insurance, make sure that you review the Summary of Benefits and Coverage for your plan. Familiarize yourself with your deductibles.
If you do not have insurance, look into signing up for health insurance through the health exchange. Health insurance is a costly expense, but medical expenses while uninsured are will land you in significant debt.