How to Pay Medical Bills Without Going Broke: 3 Steps to Cutting Costs

You recently had an important medical procedure done, but now you’re stuck with a hefty bill that you can’t afford. Sound familiar? You’re not alone.

percentage of Americans who struggle to pay medical bills

A recent survey conducted by Kaiser Family Foundation and New York Times revealed that 26% of working-age Americans struggle to pay medical bills. Even worse, 63% of respondents who were insured (and 51% who were uninsured) exhausted their savings accounts to cover medical costs.

So, should you wipe out your savings account or ignore the bill altogether? Neither.

Follow these three steps instead.

1) Review your medical bill and look for errors

Medical providers process tons of claims, so mistakes are bound to happen. “Billing errors are common, and the most expensive error for patients is when [they] are billed an “out-of-network” charge,” says Dave Matli, Vice President of Marketing and Product UX for Parasail Health.

Billing errors are common, and the most expensive error for patients is when [they] are billed an “out-of-network” charge”

But there’s a number of other billing errors to look out for as well. If these mistakes go undetected, you may end up paying way more than you should be.

To identify possible billing errors, review the explanation of benefits (EOB) document and call the billing department.

The billing department can conduct a detailed review of your statement. In doing so, you may discover you owe less than what the bill states, due to a coding issue. There’s also a chance the insurance company made an error when processing the claim.

Explanation of Benefits (EOB) document

Your insurance company will send you an Explanation of Benefits (EOB) after you’ve received a service for which they’ve paid. This document will detail the cost of services rendered, the amount paid by your insurance, and the remaining balance you’ll need to cover.

Explanation of Benefits explanation

Source: Premera Blue Cross

You’ll want to carefully review the EOB to ensure there are no billing errors, such as:

  • Additional services that you did not receive.
  • Being billed twice for the same service, resulting in your insurance rejecting one of those claims.
  • Getting billed for the wrong diagnosis and
  • Paying an incorrect coinsurance amount due to miscalculations made by the doctor’s billing company.
  • Falling victim to insurance fraud and medical identity theft.

Contact the provider immediately if you spot errors. It’s also a good idea to compare the EOB to the bill to ensure the amounts listed are the same.

If you don’t receive an EOB within eight weeks after a doctor’s visit (for any reason), make sure you call and request it.

2) Don’t ignore your medical bill

Most medical providers aren’t looking to throw you to the collection wolves if you can’t pay the bill all at once. But that doesn’t mean you should sit on the bill until the collection agencies start calling.

Ignoring your bill does NOT mean collection agencies will ignore you. In fact, the opposite is true.

pay medical bills

You’ll have to pay your bill one way or another. If you don’t, or if you consistently make late payments, your credit will be hit. And it’s always more stressful with collection agents breathing down your neck.

So, you’ll want to figure out a way to pay your bill before that happens.

3) Negotiate for a reduced price

Many medical providers will consider giving a discount under certain circumstances. You can negotiate your way to a reduced bill if you prove that you fully intend on paying it, but that it’s going to be difficult for you to pay the entire amount.

Don’t wait to contact your medical provider, though. The longer you wait, the less willing they will be to help you.

The sooner you contact them and prove your willingness to settle your debt, the more open they will be to working with you and negotiating a lower price.

Negotiate a settlement

You can request a settlement if you have cash on hand. According to Gross, “This can often be completed by negotiating the allowed, usual, reasonable, and customary amounts per procedure codes with the medical provider.”

If you offer to pay the balance right away, the provider may be more willing to give you a reduced price. If they deny your request, don’t give up. Plead your case to management to see if you can get better results.

Request a payment plan or financial assistance

If you find it impossible to afford the payments, immediately contact the billing department to request a payment plan or financial help. You can ask them to stretch the payments over a longer period to make it more affordable.

If you need financial assistance, prepare to provide supporting documentation.

“The medical provider may request financial information, such as bank statements and prior year tax returns, to prove [your] inability to pay [your] medical charges,” notes Adria Gross, founder of MedWise Insurance Advocacy.

Bonus tips: before the visit

1. Request a quote

Before you agree to have a procedure done, retrieve a written quote from the provider. Confirm that it includes all costs and parties involved, including lab fees.

There’s no way to guarantee that the final bill will be identical, but you’ll have an idea of what charges to expect. Plus, you’ll have evidence to substantiate your claims if the final bill is much higher.

2. Learn the lingo

It also helps to familiarize yourself with common medical terms. Some terms you should know:

  • Deductible: your out-of-pocket costs before insurance coverage kicks in.
  • Copay: the fee you must pay for a specific type of visit or service.
  • Coinsurance: the percentage of costs you are responsible for.

3. Negotiate the fees before the procedure.

If medical bills are a result of an unexpected medical emergency, this tactic won’t work. But if you have a procedure planned soon, inquire about special rates. You may qualify for a government program or discount if you fall below a certain income level or have extenuating financial circumstances.

How to pay your medical bill: As a last resort

Hire a medical billing advocate to review your bill and help settle your case. “These are specialists who’ve usually spent a career in healthcare and know how to re-negotiate discrepancies and reduced settlements,” notes Matli.

Debt settlement companies can also help you negotiate a lower balance for your medical bills. They aren’t cheap but they can save you a lot of money. However, a debt settlement will probably hurt your credit so it is generally only a good idea if you already have poor credit.

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If they can agree on a reasonable settlement amount, you can take out a personal loan to pay the balance.

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