In most cases, medical debt is the result of an emergency situation: you develop a complication from a pre-existing condition, or get into an accident, or otherwise become seriously sick and in a matter of weeks you can rack up a five-figure hospital bill. Medical bills are one of the things that can quickly turn your financial situation from very good to very bad, and they’re actually the main reason why people file for bankruptcy.

Most of the time, they are large amounts: thousands or even tens of thousands of dollars. To further complicate things, they’re somewhat hard to track because you rarely ever get one bill that includes everything. Instead, you might get one from the physician, one from the anesthesiologist, one from the hospital, and so on with every person or institution that you’ve had to go to in order to handle your medical problem.

With all this being thrown in your face shortly after a medical issue, it can be hard to know exactly where to start. More often than not, when you add up the bills, what you get is a total that is beyond what you can reasonably afford to pay over the next several months. Even if you can pay them, it really doesn’t hurt to try and reduce the bill by as much as possible. Well you can take action and negotiate your medical bills, although most people seem to either not know about it or think that they don’t have a reasonable chance of succeeding at it.

What Is Medical Bills Negotiation?

To make a long story short, it’s a process where you or someone else works with the people who have provided you medical services. The goal is to either reduce the total amount you owe, or the required monthly payments that you would have to come up with. This way, you can come up with a plan that is more in line with your financial capabilities. Most people, when faced with a too high medical bill, just figure that they’ll file for bankruptcy and let time take care of it. Well it’s really not the only option at their disposal.

On a side note, one option that should be avoided at all costs is paying your medical bills with credit cards. First of all, you might think you’re paying the bills, but you’re really not. You’re simply changing who you owe money. You previously owed money to medical service providers, now you owe money to one or more credit card companies. Secondly, when you do this, it’s very likely that the credit card companies will charge you a higher interest rate than the previous creditors. Finally, when you transfer the debt to one or more credit cards, you may become ineligible to get medical financial aid because that debt no longer lowers your gross income. So you’re really hurting yourself instead of improving your situation.

The first thing to do is to resist the temptation to pay off the smaller bills and leave the larger ones to deal with later. This is often a mistake, since large amounts tend to be transferred to collection agencies more quickly than smaller ones. Then it’s time to put yourself in a negotiating mindset. Think about it, if you can negotiate with the seller when purchasing a home, and you negotiate on the price of a car – therefore you can surely negotiate with your doctor or hospital, or medical providers regarding medical debt.

How Do You Negotiate Medical Debt?

Important caveat: knowing which bills to negotiate is very important. If you are still receiving care by a doctor, it makes sense to pay the full amount. Otherwise, you could risk being denied future service, or having to prepay for services with that doctor.

That being said, you need to go through all the bills you’ve received, line by line. The reason is that billing mistakes are pretty common and you don’t want to have to pay for any services that weren’t actually provided to you. You can sometimes shave a nice amount off the initial bills just by doing this. Also, although this post is mostly targeted towards people who are uninsured, in the event that you’re faced with a large bill in spite of insurance coverage, you need to know what expenses of the bill will be paid by your insurance provider, and exactly how much of the bill they will foot. This way you’ll know how much will come out of your pocket.

One way to handle medical bill negotiation is to do it yourself. Sure, it will require a bit more on your part, you’ll have to put in some work to find the right people to talk to, get the responses that you’re looking for, and work out an arrangement. Here’s a suggested approach.

Make sure to be delicate in your negotiation approach. For example, if you want to have an overdraft fee or a credit card late payment fee to be waived, you probably won’t be successful if all you do is yell at the customer service representative. Conversely, if you keep calm and polite, yet firm, you have a fighting chance. The same holds true in this situation: explain to your hospital or doctor why you can’t pay. If your reasons are valid or reasonable, they will usually understand and be open to discuss the matter further with you. You effectively need to prove that the charges received are too high for the income and expenses you have. Remember to keep your calm through the process. If you get angry, the negotiation will pretty much be over.

Now when it comes to the actual process, you need to understand that the sooner you tackle the problem, the better your chances are of a favorable outcome. Secondly, make sure to keep in contact with your creditors (everyone you owe money to such as physician, doctor, medical organization or hospital) and carry a record of all your previous conversations in regards to the concerned matter and the name of the officers you spoke with. Make sure you document all the things you did, when you did them, and the outcome. If you have a call with a creditor, then try to record it if your state allows it as 35 states do.

What do you want out of the negotiation? First, you want to have as many medical fees or underpayment penalties associated with your balance removed or reduced. Secondly, you want to negotiate a payment plan. Your physician, doctor, medical organization or hospital stand a better chance of getting paid that way, so they will often times take smaller payments over a longer period of time. Try to get an agreement for a reasonable payment plan that you can afford.

If you do reach an agreement with your creditor (payment plan or payment in full), document it and send it to your creditor. If you are paying by check add to it “Cashing Check Constitutes Payment In Full.” Third, never take the first offer you get if they are eager. You need to sense how eager or quickly they respond with an offer because if you can get a 2nd or 3rd one they usually improve. The tough part is knowing when you should take an agreement or request a better offer. Lastly, if all else fails (but that’s really a last resort ploy), you can always point out that with bankruptcy they won’t get paid. This will usually soften their stance toward a payment plan. One important part to keep in mind is that you must reach a compromise with the biller. Have them reissue the bill showing the reduced amount and then promptly pay it.

Unfortunately, sometimes doctors and hospitals may not want to negotiate with you. At this point, it’s best to have a professional medical bill negotiation company take care of it for you. This type of process has become very common, and thus, many people have started to take up careers where they simply help people re-negotiate their hospital and doctor bills. The advantage here is that you will be able to get the best deal possible without any real work on your part. Obviously, the disadvantage is that you will have to pay for such a service, but it may be worth it if your medical bills are substantial.

You can also contact charity organizations for help. There are organizations that exist which may provide some financial help for you. You can find them online and the recommended site below provides some resource links to them. Another option is to apply for Federal or State medical financial aid. Before doing that you have to make sure that you are eligible for getting the aid and usually each State’s website explains what eligibility requirements are. Otherwise, it will be a sheer waste of your time. Medical financial aid is provided by the state, mandated by the Federal government through a program called Medicaid.

No matter how you go about it, you should at least give negotiating your hospital and doctor bills a shot. You never know what may be able to be worked out, and as mentioned earlier, we could all use a little extra money each month! And remember that waiting for your medical bills to be sent to a debt collector and then trying to settle is a mistake because it will cost you money and your credit will be trashed.

© How To Negotiate Medical Bills

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Ask many people what the best approach for getting rid of debt is, and you’ll hear something to the tune of: “Pay for everything in cash and don’t incur any debt.” Although this sounds like common sense (and actually is), the truth is that it’s an impractical answer because it’s hard to implement for us mere mortals who don’t have the luxury of a $75,000+ yearly income with no kids. Actually, from a personal point of view, I don’t think that the best way to handle your finances is to pay for everything with cash, even if you have a high enough income to have that luxury.

I don’t have the statistics, but I think it’s safe to say that very few people buy their home with cash. There are also other situations that may arise and totally wipe out your life savings should you decide to pay for them with cash (medical and family emergencies, unexpected car failure…). Carrying SOME debt doesn’t necessarily imply that you’ve mismanaged your entire financial life. It might actually mean you’ve made sound financial decisions, such as increasing your earning power by going to school or using the power of leverage to purchase an asset that (usually) appreciates, such as a house. The tricky part is realizing when you have too much debt, and usually people don’t realize it until it’s too late: when they can no longer meet their payments. Once you suspect that your debt is starting to spiral out of control, you should consider a quick diet for debt reduction.

Step 1: Stop Getting Deeper In Debt

The only exception should be a case of emergency, like the ones mentioned earlier. And no, getting a new home theater system or updating your wardrobe do not qualify as emergencies, in case you were wondering. The purpose of this article is not to tell you how to spend your money. Instead, it’s about being smarter about handling your debt by identifying the best lending deals. Unfortunately, freezing your debt usually goes hand in hand with freezing your superfluous spending, especially if you don’t have the income to support that debt. Stick to the indispensable. Real simple, but easier said than done.

Step 2: Evaluate Your Financial Condition And Start Planning

You know the saying: “If you fail to plan, you plan to fail.” It never fails (pun intended). Creating a plan to get out of debt involves several steps. One of the most important of these steps is taking a close look at each and every one of your creditors. You need to clearly understand exactly how much it’s costing you to have each particular debt, keeping a watchful eye on interest rates, late fees, and other penalties. You will also have to review your payment history with all your creditors, namely did you pay on time. This can prove critical.

Your financial plan must be a roadmap that takes you from debt to debt-free. To do that, you need to know how much your total debt is and how long it will take to pay it off, given your current rate of payments. Of course, like all plans, it must offer some degree of flexibility, but without it, you likely will just keep spinning your wheels without getting anywhere.

Step 3: Look For Money Saving Opportunities

There are plenty of options out there to save money on your debt payments, you just need to keep an eye out for them. It’s often pointed out that whenever we get interested in something, we instantly start to run into that thing more often in our daily lives. It’s not that those things surged in popularity the minute we started wanting them, it’s just that our awareness of them grew, and they had actually been there all along. The same is true when you start looking for debt-reduction options. As you start to dig into debt management, educate yourself, and closely examine your debt situation, many opportunities to save money on your payments will start popping up, the first of which will probably be all those low-rate credit card offers that flood your mailbox on a daily basis.

Last year alone, banks mailed about 2.5 billion of these offers. Many of them will save you money, but you need to read the fine print, evaluate the offer against your current offers and consider your particular financial situation so you can determine whether or not their offer is truly something you can use to your advantage.

Step 4: Take Action To Reduce Your Debt

Decision without action is nothing more than wishful thinking. All the daydreaming in the world won’t help you pay off that debt! For example, if you have medical debt, start looking into how to negotiate your medical bills. Formulate your debt reducing plan today and, most importantly, see it through! Simply knowing the route from your home to your destination won’t get you there until you actually get on the road.

Step 5: Track Credit Card Offers And Loan Offers

Remember those low rate offers I mentioned earlier? One of the best moves you can make is to track them and save them in a box or file. They can pay immediate dividends. You can use them to call up your current bank or credit card company and state the offer that you just got from such and such. More often than not, you’ll get positive results. Not only do you already have a history with them, but also acquiring new clients is very expensive for these companies.

Another reason for tracking offers you receive is that should you need to turn to another financial institution for cheaper financing, you’ll already have done your research and know which banks to contact, many of which may have already pre-approved your application. You will then be negotiating from a much better position, assuming that your payment history is relatively satisfactory.

Step 6: Don’t Rush Out And Close Credit Card Accounts

After paying off a credit card, do not cancel it. When you cancel your credit cards, you hurt yourself in several ways. The first problem with closing your accounts is that, should an emergency arise, you will be at the mercy of whatever bank(s) you decide to keep. If, for whatever reason, they decline your request, you’re left out in the cold with few options. The second problem with canceling your credit cards is that when you do, you also delete the credit history that’s attached to that card. So the older the canceled card is, the more your credit score is likely to suffer, since a part of the calculation takes into account the length of your credit history.

As long as your current credit card accounts (and lines of credit) aren’t charging you any fees for inactivity, then it’s in your best interest to hang on to that account. Just make sure you don’t turn right back and start charging them. In short, don’t give any financial institution a monopoly on your business. Keep your options open.

Step 7: Pay Your Debt On Time

Do it no matter what it takes. When it comes to debt repayment, the capital sin is paying late. You will feel the pain immediately with late fees (that’s money which would have been better used to reduce your debt). You will also feel that pain in the future as paying late hurts your leverage and bargaining power in future negotiations. But most importantly, paying late makes you a “risky” customer and makes it that much harder for you to secure the best rates and deals when you need them most, like on a mortgage. In the long run, that kind of negligence can cost you thousands of dollars. If you have the option to borrow (from family members or close friends), do so to make sure your payments are made on time and your interest rates are as low as possible. Debt management is a continuous process. Stay on top of your situation, and keep more of your money.

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