How to negotiate your hospital bills

Opening a huge medical bill after a hospital stay can be enough to make you sick all over again.

Just ask Todd Fassler, of San Diego, who made headlines this month when he was bitten by a rattlesnake and charged $153,000 for a four-day hospitalization. A freak occurrence isn’t the only way to end up with a huge medical expense, though. Those with chronic illnesses face large costs over and over. Of all new cancer drugs approved in 2014, none cost less than $120,000 a year, according to the Mayo Clinic Proceedings, prompting a petition signed by 117 oncologists to lower costs.

Those high prices aren’t necessarily reflective of value, and they can sometimes be lowered. A NerdWallet Health analysis found that 49 percent of audited high-risk Medicare claims contained billing errors in 2013, causing the claims to be overpaid by an average of 26 percent. Meanwhile, there’s no standardized way to set hospital charges, and some medical centers bill over 50 times what others do for the same procedure, according to the analysis. But according to a 2007 Consumer Reports survey, 93 percent of people who tried to haggle down medical bills were successful, so don’t overlook one of your most powerful tools: negotiation.

Here’s how to approach your negotiation, even if you don’t know anything about medical billing— yet.

Don’t pay right away

If you’re asked to pay as you’re leaving the hospital, you can refuse. Doctors may require a copay at office visits, but when you’re hospitalized the rules are different. “It’s your right to see a final bill before you pay anything,” says Adria Gross, a medical billing advocate and founder and CEO of MedWise Insurance Advocacy.

If you have health insurance, you’ll receive an explanation of benefits (EOB) from your health insurance company. EOBs usually state that they are not a bill, and as a result a lot of people toss them in the trash. “Don’t throw it out! Examine your EOB carefully, and don’t pay a thing until you do,” Gross says. The EOB will tell you how much the hospital is charging you, how much your insurance agrees to pay and how much you’re expected to pay.

Prepare yourself

When you have the EOB, compare it to your hospital bill and insurance policy to make sure your insurer covered what it should. If your hospital bill isn’t detailed, call the billing manager and request an itemized bill with current procedural terminology (CPT) codes.

CPT codes are 5-digit billing codes that identify charges for health services. You can look up the codes online with a search engine or you can ask your hospital’s billing department.

If you don’t have health insurance, you’ll have no EOB to compare your bill to, but you can still negotiate the charges. In fact, the hospital staff may be even more willing to work with you just to get a payment. Ask the hospital’s billing manager about lowering the charges or finding charity assistance.

At this point, you probably have questions. Write them all down. “Go in asking about what you got, what you paid for, and go in knowing what the going rate is in your area. You can find that online,” says Bonnie Sheeren, a patient advocate and CEO of Houston Health Advocacy.

Price quotes are important; if you don’t know what a fair price is, you’ll have a hard time negotiating one. Try fairhealthconsumer.org, a site with regional pricing data that you can look up by CPT code.

After you’ve got your documents, price quotes and questions in hand, it’s time to make an appointment with a billing staffer.

Approach with the right attitude

If anger is your gut reaction, check that at the door. “If you start getting angry and yelling, it’s over,” Sheeren says. “Nobody will want to work with you.”

In a billing dispute situation, “you might just really want to give someone a piece of your mind. But is that really your end goal?” Sheeren asks. She suggests you approach your negotiation with an attitude of cooperation. “Let them know you want to pay a fair price for the services you received, and they’ll be more willing to work with you.”

If your charges are way higher than your online quote, show it to the staff. “Say to them, ‘Hey, these are reasonable charges for this treatment. Will you please accept this price?’ ” Gross says. “You’d be surprised at how often they do.”

When you’re getting nowhere ...

If you’re rejected, don’t give up. “Sometimes when you’re talking with a lower-level person, they have no power whatsoever over your situation,” Sheeren says. “It’s perfectly fine to let the head of the hospital know you’re having these issues.”

She recommends a certified letter to the CEO of the hospital explaining what problems you’re having disputing costs and what you think a fair price is. “Never assume the people at the top know what’s going on in the billing department of their institution,” Sheeren says.

If that fails, keep going higher. “You can go to the state department of health, the attorney general or get in touch with an advocate,” Gross says. It may be a long road to lowering your medical bill, even with an advocate, but it can— and has— been done.