Cut Medical Bills With a Hospital Billing Negotiator

Have you ever received a great, big, ugly bill for services rendered from a hospital or other healthcare provider? This can happen to just about anyone, whether or not you have health insurance. When a bill of this size comes in, you can sometimes get it cut by using the services of a hospital billing negotiator.

That’s a person or agency who steps in on your behalf and negotiates a reduction in the amount of the bill, or can set up other terms that will make it easier for you handle the obligation.

Why you may need a hospital billing negotiator

There was once a time – long gone – when you could have a major medical procedure and never see a bill from a provider. If you did, it was a small amount, probably no more than a few hundred dollars.

That whole situation has changed today. It’s now more the rule than an exception that you’ll receive a bill for thousands of dollars in connection with just about any health care procedure you have. Whether or not you have health insurance will determine the size of the medical bill you need to pay. If you have health insurance, your portion may be a few thousand dollars. But you don’t have insurance, the bill will likely be in the tens of thousands of dollars.

In recent years, health insurance companies have increased the amount of out-of-pocket payments by patients in order to keep premiums more affordable. The kind of health insurance that will provide you with top coverage without ever seeing a bill from a provider is prohibitively expensive, if it’s even available.

The patient portion – comprising the bill you’ll receive – typically includes co-payments, deductibles, co-insurance, and uncovered charges. It’s precisely that combination of responsibilities that can make figuring out a health care bill so complicated.

As a patient, the complexity of a medical bill can be overwhelming. Not only will the bill be written in some language that looks like Greek, but if you have no experience in negotiating, trying to handle it yourself can be beyond difficult.

Going the DIY route to negotiating

If you have at least some basic knowledge of medical billing, and you are confident in your ability to negotiate, you might want to try the do-it-yourself route.

If you do, make sure that you review any bills you receive from the healthcare provider. Check the bills for errors, as well as for overcharges and for services not provided. If there are any items on the bill that need to be disputed, this should be the first place you’ll start your negotiations. You want to get the bill down to its true amount, and nothing more.

Once you and the healthcare provider are in agreement on the amount owed, it’s time to do what you can to cut down the bill to a number that you can actually afford to pay.

Healthcare providers, and especially hospitals, often negotiate lower settlements. Just like everyone else, providers want to get paid, and they are well aware of the half a loaf is better than none doctrine. In addition, they don’t want to push the patient into bankruptcy, in which case they’ll get nothing at all.

You can use this to your advantage. Try to get the provider to cut the bill as low as possible. You may have to make the entire payment in order to get the biggest reduction. But failing that, make the biggest upfront payment that you can, and work to arrange a monthly payment plan that your budget can accommodate.

Using a patient advocate

Healthcare providers, and especially hospitals often have a person on staff – either an employee or an outside contractor – known as a patient advocate. It’s this person’s job to represent the patient’s interest throughout the process, typically from pre-admission through your final payment.

While the job of the patient advocate isn’t strictly to handle the financial side of your treatment, they can nonetheless represent an inside contact when the bills start coming in.

The advantage to using a patient advocate is that they are involved in the system, and understand how works. They are aware of various financing options that the provider has available, options that you as a patient would never know about. They may be able to direct you toward the proper parties within the organization, help to arrange financing plans, or even settlement options.

However else you might plan to handle your hospital billing, it’s a good idea to start with the patient advocate.

Using a professional hospital billing negotiator

If you’re not getting much help from the patient advocate, or you don’t feel comfortable negotiating a settlement on your own, or the size of your bill is just so enormous that you have no capability of ever paying it, you always have the option of bringing in a hospital billing negotiator.

This is a person or agency specifically involved in the business of negotiating medical bills. Since this is what they do, they have a solid idea as to what can be done to reduce medical bills, and even how much flexibility a specific provider will offer.

A good hospital billing negotiator starts by validating the accuracy of your bills. Once that’s done, they will handle the negotiations for you, and negotiate the best settlement possible. Some will even review and negotiate your charges prior to your receiving services.

Hospital billing negotiators do charge fees. However, they do it by charging a percentage of the amount they’re able to save on your overall bill. Their fees are typically somewhere between 25% and 35% of the amount that they reduce your bill.

Let’s say that you receive a bill of $10,000 from a hospital for a recent stay. If the hospital billing negotiator can get that bill cut down to $5,000, and their fee is 30%, they’ll take $1,500 of the $5,000 that they saved you. This is similar to attorneys working on a contingency basis, and only charging you if they win your case.

This will mean that you will owe the hospital $5,000, the hospital billing negotiator $1,500 ($5,000 X 30%), and you will get the benefit of a $3,500 savings on what was originally a $10,000 bill. You’re total out of pocket on the bill will be reduced from $10,000 down to $6,500.

Which ever way you choose to go – DIY, patient advocate, or hospital billing negotiator, it’s important to develop a strategy for dealing with large medical bills. It‘s likely they’ll only increase in the future.

Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.

All posts by Kevin Mercadante