Deflate Puffed-Up Medical Bills With A Phone Call

The New York Times Bucks blog talks up a medical bill negotiation tactic that saves people who are in the know thousands of dollars. The secret: Pick up the phone and ask the billing department guy how much he’ll take off your bill if you pay in full immediately.

The move can save you 25 percent off your bill or more for two reasons:

* Hospitals and doctors tend to over-inflate your charges to compensate for those who skip out on payment. So since you’re being charged too much in the first place, medical health care providers have some wiggle room.

* Since medical bills are a top cause of bankruptcy, billing departments fear they won’t be paid so are willing to take smaller payments upfront.

The blog got the tip from some book. Didn’t catch the title, but it’s probably a fantastic read filled with other great financial tips as awesome as that one.

One Way to Lower a Doctor’s Bill [New York Times Bucks blog]


Edit Your Comment

  1. domcolosi says:

    Phil is quite the subliminal salesman…

  2. Evil_Otto would rather pay taxes than make someone else rich says:

    Somehow, the resident Consumerist right-wingers will make this Obama’s fault.

    • PencilSharp says:

      And the resident Consumerist left-wingers will make this Bush’s fault.

      Don’t get me started on those &^%$#$ libertarians…

      • jurupa says:

        Ya because us libertarians will blame Bush and Obama. :P

      • SugarCubesAndHandcuffs says:

        Waaaaaait a minute now… what’s wrong with us libertarians? =(

        • longfeltwant says:

          What’s wrong is that you have a childishly simplistic political ideology which ignores the vast majority of human behavior and latches onto the vanishingly tiny sliver of human behavior which is in line with the ideology.

          That’s what.

    • rpm773 says:

      Somehow, touchy people of a certain political persuasion will try to find a way to make a comment irrelevant to the article.

      There. Now we’ve covered all the bases. Let’s move on

    • Master Medic: Now with more Haldol says:

      I was under the impression, as advised by the Obama Administration that this was Bush’s fault.

  3. davere says:

    While this doesn’t always work, it does work often enough to make it worth trying. I was surprised too after a friend insisted that I try it. The catch is, like the article states, you have to be willing and able to pay in full on the spot.

    • FatLynn says:

      If you look at your bill, they will have things on there like 2K for “incidentals”. If you can cover at least the variable costs of treating you, they’ll let some of that go.

  4. energynotsaved says:

    If you know going in that you can’t pay, talk to them first. Many physician offices routinely offer 25% off for cash payments. Also, do some research about the doctor. Many times you will find that s/he is a big fan of the military, etc., and will offer up a bit more of a discount IF YOU ASK. Even my evil ex use to do this! (Sorry. No longer. Very evil.)

    I am faced with some horrible financial projections for urgent dental work. My fancy dentist has an arrangement with some finance company where I can borrow the money to pay him for 12 months no interest or finance charges. As I usually do in these borrowing situations, I divide the total amount financed ($4250 in my case) and divide it by 10. That yields $425, which I’ll pay per month for 10 months. That pays off the loan BEFORE it is due and BEFORE the finance company can slap me with some 28% retroactive interest rate. (I like to give myself plenty of room to overcome any move by the finance company!)

    • vdragonmpc says:

      For gods sake check with another dentist. My mother, wife and I were sucked in by a ‘good dentist’ and he used GE finance. That guy inflated the bill and micro charged for every little thing. And they liked to upsell you in the chair.

      I left when his niece drilled my front tooth with no local. Read that again no local. Holy mother of god that woke me up. She sad the pain killer would make it worse. I fail to see how. Yup in the bill guess what was there. And no discount for making me hollar.

      • energynotsaved says:

        It is GE credit. I have time. I’ll start checking around. Thanks. Sorry for you. That is just awful.

    • Con Seanne-BZZZZZZZZZZZZ says:

      Just one evil ex, or SEVEN? Six or seven…

  5. Mr_Human says:

    I’ve found that hospitals are willing to negotiate. You can start with the 25% for paying now and then work from there. The goal is to get to pay what the insurance companies pay, which is a lot less than the stated cost. I had some have some surgery once that was out of network surgery once and negotiated for days with their billing department. The fees came down pretty dramatically.

  6. TouchMyMonkey says:

    So if I read this right, universal health care will make such overcharges not only unnecessary, but largely a thing of the past, since hospitals will be dealing only with insurance companies who will strenuously object to such overcharges, thus setting the rules for such in their favor. Anybody else now doubt how the CBO scored the HCR bill?

    • fsnuffer says:

      Yeah, I doubt how the CBO scored it. Insurance companies are driven by profit, governments are not. If the insurance companies were allowed to operate with minimal interference by the government, your point would be valid.

  7. Nigerian prince looking for business partner says:

    This strategy works well if you are uninsured but doesn’t work nearly as well if you just have a high deductible. If the hospital is going after you for your $5,000 deductible, it means it’s already been billed to your insurance and reduced to the negotiated rate. It’s hard to get them to reduce it even further.

    That being said, if you can’t pay in full, hospitals are usually pretty good about very long term payment plans. Private practices can be entirely different — my wife’s obstetrician required us to pre-pay our deductible for all of the pre-natal care and birth immediately after her pregnancy test came back positive. We had to write a $2,500 check to continue seeing him.

    • Tim says:

      You sure about this? Not that I’m challenging you, I just want to actually understand it.

      My employer is thinking about switching to a high-deductible plan with an HSA or HRA. The company’s insurance consultant tried to sell it to us last week, with one of the big benefits being the ability to take control of your health care costs. But it seems that if you can’t negotiate payments with a provider, your ability to take control of your costs seems pretty hampered, no?

      • Nigerian prince looking for business partner says:

        It’s a complicated issue. I have an HSA/HDHP plan through work. We have a $5,000 family deductible and $2,500 deductible per person. I’ve had the plan for about 4 years.

        In theory, we should be able to negotiate prices with providers, conduct cost comparisons, etc. but in practice it is exceedingly difficult to do so. Even with an HSA/HDHP, providers will still bill your insurer, who will send out an EOB, and your provider will send you a revised bill for the negotiated amounts.

        Often, they will contact your insurer prior to care and then make you pre-pay for your deductible based on the pre-negotiated rates for care. This can be a PIA, because they may make you prepay $2,500 because the estimated cost is $3,000 but in reality, when it’s all said in done, the negotiated rate will actually be $1,500 and then you have to fight to get the $1,000 overpayment back. This is a bigger issue for medical issues that require many appointments and everything is billed to “global” (where it’s not processed until your care is completed).

        In the end… you still can’t negotiate as an individual because the provider still bills your insurer to determine the negotiated rate. To make things even more complicated, providers can’t tell you what your negotiated rate will be until the claim is filed.

        • Nigerian prince looking for business partner says:

          It may sound like it but I’m not actually bashing HSA-plans; I’ve been very happy with mine for as long as I had it and it is significantly cheaper than the previous PPO that I had.

          One big issue with HSAs, is that as part of health care reform, many of the advantages of them are going away. You will no longer be able to use the funds to buy OTC drugs and a whole list of other things, the penalty for non-medical withdraws is doubling, and the maximum contribution is not increasing. The Obama administration also just added a whole list of preventative care that must be provided for free and this will disproportionately impact those with HSA/HDHP plans.

  8. GuyGuidoEyesSteveDaveâ„¢ says:

    I recall an NPR story about how much doctors spend on billing to deal with all the paper work and how much time it takes. I know one of my ex’s doesn’t have health insurance, and deals with her Dr.’s on a “cash on the barrel head” type of way. Many Dr.’s are happy to have the money rather than the “promise” of money from the Insurance company.

    Oh, BTW, nice round about disclosure statement at the end.

    • PencilSharp says:

      Too true. Tales of Billing Department Hell are legion amongst medical practitioners. Many are quite willing to cut slack for cash payments, as well as poorer folks, if you’re willing to try.

      After all, 75% of something (or even 10% of something) > 100% of nothing…

  9. drburk says:

    I used to request 25% but then took part in the following conversation:
    “Hi, I’m calling about bill #24601 if I pay in full today can you knock 25% off my bill?” To which the employee responded “the standard hospital policy is a 35% discount for payment in full prior to the due date.” That prompted me to change my standard asking rate to 35%.
    I’ve found some doctors and hospitals are even willing to accept an upfront payment for a larger discount again around 45%. When my wife had surgery the doctor ran an estimate for me. I called the hospital and pre-paid about half their estimated charges up front for a 45% discount of those expenses (I only paid what I new would be used ie the room, and the like). The doctor also accepted 45% off his services. I would pay my foot doctor in a similar manner. I was going to cash by a series of xrays and shots so I paid up front for a 43% discount.

  10. pot_roast says:

    “The secret: Pick up the phone and ask the billing department guy how much he’ll take off your bill if you pay in full immediately. “

    And that’s usually the problem. You’re making payments on the medical bills because you don’t have thousands of dollars in cash just sitting around.

    • Tim says:

      Take out a loan. Chances are pretty damn good that the interest on the loan is going to be less than the discount they give you.

    • lim says:

      Too true. Even with 25% off I didn’t exactly have $15,000 laying around to pay the hospital. The only “negotiating” they were willing to do was let me pay a bit (of the full amount) each month. That 15,000 doesn’t include the surgeon, who used a billing service that wouldn’t negotiate with me and the anesthesiologist’s firm demanded full payment within 6 months.

      And yes, I did try. I spoke to four different people at the hospital’s billing dept. and was basically told that I didn’t qualify for help and if I couldn’t pay in full there was no discount.

      Gosh durn lily livered pond scum coated sons of mothers the lot of um.

  11. Bohemian says:

    It also depends on the provider or hospital. With one provider that has a hospital & a network of clinics we simply asked if they could waive some of our bill. We have insurance and it had already paid their portion. The out of pocket was still pretty huge. I assumed we would not qualify for any financial aid since our income is higher but asked anyway. I hoped at best maybe they would knock 10% off our bill. They wrote off the entire remaining amount.

    The other hospital & clinic group in town would have taken your last penny, your first born and your house.

    It doesn’t hurt to ask when the stakes are some huge medical bill you might be paying for years or worse, end up in collections.

  12. Tim says:

    Wow. I’m so stupid.

    I didn’t even realize until I click the link who the author of the book is. I feel smart.

  13. ARP says:

    Also remember that doctors tend to pad their bills heavily since their agreements with their insurers state that the insurer will get an X% discount or pay only $X for a certain type of treatment. It ends up being a cat and mouse game, with the patient being the loser since when they pay out of pocket, they’re paying the fully loaded bill, not the discounted bill. This is a huge contributing factor to the number of medical bill based bankruptcies, we have to pay full costs.

    If you can get through to the right person and tell them you’re responsible for paying, they may give you some discount.

  14. Nigerian prince looking for business partner says:

    I really can’t comment on the stability of their systems but as an American, I find it very remarkable how in much of the western world, if somebody has an emergency appendectomy or goes into labor, upon discharge from the hospital all they get is a list of instructions for follow up care.

    I’m so used to paying upfront deposits, reading EOBs, dealing with the financial office, insurance pre-authorizations, payment plans, trying to figure out if everyone is in-network, etc. It’s almost hard to believe that in many parts of the world, you just get admitted or discharged from the hospital without the fights with billing or insurance.

  15. dru_zod says:

    I had some tests done at the local hospital a few years ago when I didn’t have insurance and I found that it wasn’t even necessary to ask for a reduction. The tests cost about $600 or so, and I was paying it in monthly $100 payments. After the first three payments, I got a letter from the hospital saying that they were reducing my bill to a total of $400 if I paid the balance off that month. I didn’t even have to ask, they offered the reduction just like that and saved me $200. Of course, that was when the hospital was county-owned and not part of some large conglomerate. Now it’s been bought out by a system of hospitals and probably wouldn’t do that.

  16. docvb says:

    great way to screw those damned doctors.

    for the emergency service at 3 am. on a holiday. for a problem that have been going on for 5 weeks. caused by some self-caused activity that caused this same problem last year. And now, 16 weeks later, you don’t want to pay the bill.

    Good luck having your furnace/airconditioner/car fixed the same way. You’d prepay with a big surcharge for the date/time/convenience if you could even find someone to answer their phone. But it’s fine for the doctor that you woke up.

    I sure wish I could pay for groceries, my mortgage and whatever I owe YOU for in this same way.

  17. jujubesadad says:

    I was offered two payment options after I broke both of my arms (wrists) in an accident. Option one was in fact a 25% discount if paid in full immediately. My total bill for the ER visit (~$8,000.00 for x-rays, head CT and casts) and a subsequent surgery to implant a plate and 4 screws (~$24,000.00) was ~$32,000.00. Naturally I didn’t have $24,000.00 so I asked if there was another option. Option 2 was to split the bill in 12 equal, interest free installments. I also didn’t have over $2,500.00 excess dollars per month. These bills do not include the doctor’s fees or the anesthesiologists fees (for surgery) as they are not employed by the hospital. I asked if the hospital would be able to reduce their bill to the standard negotiated rate that the insurance companies would reimburse and was told that it was, in fact, illegal in the state of New York to do that. ASTONISHING!!!

    My doctor bills of ~$5,400 (above the aforementioned $32,000) included the ER visit, 3 months of bi weekly follow-up visits which included x-rays and re-casting as necessary to accomodate my arms which were wasting away from disuse, the surgical fee of ~$1,200 and anesthesiologist fee of ~$1,200. My doctor allowed me to make monthly payments which we nogotiated at $250/month. I was all too happy to pay my doctors who, I believe, provided an honest and fair product and service for an honest and fair price. By the way, the 1.5 inch plate and screws that were installed to repair my wrist were billed at a materials cost of $5,000.00!!!

    We’re talking technology that has been around for at least 100 years (casting) and 50 years (guessing) for x-rays. The hospital’s fees are so disconnected from reality it’s no wonder healthcare costs and premiums rise by double digit percentages annually.

  18. maybachjr says:

    I was in the emergency room for less then 3 hours 2 weeks ago, the hospital bill alone is for $9450. I will be billed by the service providers separate. In a unforeseen turn of events I had to seek medical attention from a different hospital just hours after the first hospital sent me home.

    The 2nd hospital had to call in a surgical team in the middle of the night to operate, and I emailed the first hospital asking for answers. In the first hospital people wanted to leave me and have the next shift do tests etc, I saw a Dr when I went in but after that was brushed off every time I asked to talk to him. They sent me home with 6 Rx, 2 that I would have told the doctor I didnt need and why. Again if the doctor had evaluated me or sent me home with any instructions but they dumped me with copies of all my tests.

    They actually provided proof in those papers my condition was serious, and have since only sent a generic letter offering me a reduced amount of $750. The ER doc I never saw billed me a week later for $80.

    The OP saved 25%, by almost dying later I saved a whopping 90% this month on my medical bills. Of course hell will freeze over and I am filing formal complaints against the first hospital. I feel very bad I probably wont be able to pay the 2nd hospital, according to the details of this article I guess I should thank people with insurance since they overcharged you to pay for people like me.

    Maybe they just overcharge people without insurance knowing it forces them into BK thus making it a loss that the hospital will write off. His $4000 bill was for actual care, my visit for a few hours alone was over twice the amount. I can only imagine what the cost from the 2nd hospital will amount to……enough to force me into BK because 25% off just isnt going to cut it.

  19. roguemarvel says:

    This is good to ask about before service sometimes. I had to have a CT scan a few weeks ago and my insurance deductible is $10,000, so it was still going to cost me around $600 out of pocket for the CT. The billing agent at the imaging center I went to informed me that if I self paid in full the day off I would get a better rate then if i file with insurance. The had a 45% discount for self pay in full. i saved a couple hundred bucks and felt a lot less stressed about having to take the test

  20. xeionp says:

    I am one of those guys in the billing department, I just want to make some comments.

    1. If you have Medicare or Blue cross this will not work because they fine doctors who do this, for their patients.

    2. If you do not have insurance, then find out the Medicare allowed amount and add 10%. Most doctors will accept this.

    3. Don’t cry poverty and come in showing off your wealth.

  21. whogivesaratsass says:

    I confronted my sons doctor about paying for his photos before and after oral surgery. I told him this was never explained by him or his office manager. We were in a room the two of us and I asked that it be removed or give me all the photos as I had payed for them. He started to rant and rave yelling swearing and throwing things as if he was the victim. I calmly said he did great work but that fact is I was not informed and it was not on any form I consented to. He threw me out of the office and when it came time for my sons check up he would not honor the visit even though it was already payed for. Location: Winston-Salem, NC not many Doctors in this field so hopefully everybody knows this person and avoids him. Let me know if I can put his name down as I have no problems with a lawsuit if he wants….

  22. Princess75 says:

    I did something similar about four years ago. I needed jaw surgery that wasn’t covered by my health insurance. I was in pain daily and also have a bleeding disorder that is very expensive to treat. The cost of the surgery, medicine and inpatient stay was estimated at about 125K. I negotiated with everyone and paid about 12K for the surgery. I ended up having complications and had to stay two extra days in the hospital and didn’t have to pay much more for this.The key is that I was willing to pay up front for the costs and they didn’t have to deal with my insurance company. I explained to the providers that I was in pain and really needed this surgery. My other option was to move to Canada, get a job – have the surgery after the required waiting time and come home. I wasn’t afraid to share my story and just ask. Surprisingly the only people who would not come down at all on price was the company who made the plates/screws used in my surgery. Out of the 12K about 2K of that was hardware to implant during the surgery. I found that people were going out of their way to help, when I explained my situation. I called straight to the Director of Pharmacy at the hospital to explain the manufacture of my medicine was donating all of my medicine. It’s against company policy to bring outside medication in and I knew I would need approval for this. The Director of Pharmacy not only allowed this, but also waived all of my pharmacy charges for the entire course of the stay. He arranged his schedule so he could meet me when I admitted and take my medicine himself to the Pharmacy for storage until I needed it. I’m now pain free and am so glad that I had the surgery and didn’t have to claim medical bankruptcy to do it!

  23. Miss Dev (The Beer Sherpa) says:

    I just received my hospital bills for a 3-day stay last month. One call to Exempla got me a very good payment plan and no hassles. Five calls to Kaiser and I still don’t know what I owe them (if anything) for that stay. It took me 3 calls just to get to the billing department.

    So, calling the billing department is good, but not having Kaiser is better.