How To Negotiate Medical Bills In Collections
Contents
- 1 How To Negotiate Medical Bills In Collections
- 1.1 First Steps When You Get a Collections Notice
- 1.2 Negotiating Directly With Your Healthcare Provider
- 1.3 Negotiating With Collections Agencies
- 1.4 Sample Letter to Negotiate Medical Debt
- 1.5 Getting Help Negotiating Medical Bills
- 1.6 Avoiding Medical Collections in the Future
- 1.7 Other Medical Bill Negotiation Tips
How To Negotiate Medical Bills In Collections
Getting a medical bill can be stressful enough, but finding out it’s gone into collections can feel overwhelming. Medical debt is a huge problem in the U.S. – nearly 20% of Americans have medical bills in collections. But there are things you can do to negotiate and lower the amount you owe. This article will walk you through the step-by-step process to negotiate medical bills that have gone into collections.
First Steps When You Get a Collections Notice
When a medical bill first goes into collections, the collections agency will send you a notice letting you know. The first thing you want to do is verify that the debt is valid – collections agencies do sometimes try to collect on debts that have already been paid, or were never valid in the first place. To verify the debt:
- Ask the collections agency to provide validation of the debt, including the original bill and information about the creditor.
- Check your credit report to see details about the debt, when it went into default, and who the original creditor was.
- Contact your healthcare provider to see if they have a record of the debt and can provide details.
If it turns out the collections notice was sent by mistake, you can dispute the validity of the debt with the credit bureaus to get it removed from your credit report. Provide copies of any evidence you have, like bank statements or letters from your provider, to back up that the debt is not valid.
If the debt does turn out to be legitimate, don’t panic – you still have options. The good news is that medical providers and collections agencies are often willing to negotiate payment plans or discounted payoff amounts, especially if you reach out proactively.
Negotiating Directly With Your Healthcare Provider
Before a medical bill ever reaches collections, your best bet is to negotiate directly with the healthcare provider. They have more flexibility to offer payment plans or financial assistance. Here are some tips:
- Call the billing department – explain your situation and ask about financial assistance programs or prompt-pay discounts for paying quickly.
- Ask for an itemized bill and review it for any errors – billing mistakes are common.
- If the bill seems too high, ask if they can lower it or adjust it based on your ability to pay.
- Request a payment plan spread out over several months to make it more affordable.
- Mention hardship – if you lost a job or have high medical expenses, they may offer a reduced amount.
Hospitals and doctors offices, especially nonprofit ones, often have financial assistance programs or charity care options if you meet certain income requirements. It never hurts to call and politely ask about any discounts or payment plans they can offer – the worst they can do is say no.
Negotiating With Collections Agencies
If you’ve exhausted options with your healthcare provider and the account has gone into collections, don’t panic. You can still negotiate with collections agencies. Here are some tips:
- Ask for validation of the debt – make sure it’s legitimate before paying anything.
- Negotiate – offer to pay a lump sum that’s less than the full amount.
- Request a payment plan – pay it off slowly over several months.
- Consult credit laws – debts over 7 years old or under $500 may not be reportable.
- Know your rights – learn about protections like statutes of limitations.
Some key laws protect you when negotiating medical bills in collections. The Fair Debt Collection Practices Act prevents abusive collection practices. Collectors can’t harass you with frequent calls, make threats, or share information about your debt.
Each state also has statutes of limitations on how long collectors can sue you to recover debt – often 3-6 years. And recent credit reporting changes mean medical bills under $500 will no longer show up on credit reports at all.
When you negotiate, start low but be realistic. Offer 20-30% less than the full amount as a lump sum payment. Get any agreement for a reduced payoff in writing before sending money.
Sample Letter to Negotiate Medical Debt
Sending a formal negotiation letter can be an effective way to start discussions with a collections agency. Here is a sample letter you can customize:
To Whom It May Concern:
I am writing about a medical debt I owe in the amount of $_____, which you are attempting to collect. I am requesting that you stop all collection efforts and agree to negotiate a payment plan or settlement offer for this account.
[Explain your situation – hardship, high medical bills, dispute over insurance coverage, etc.]
I am proposing that I pay ____% of the total balance due. [Or propose monthly payments of $____ over ___ months.] This is the maximum I can afford based on my income and expenses.
Please contact me by phone or email to discuss this offer. I look forward to resolving this debt through a reasonable repayment plan that works for both of us. Thank you for your cooperation and understanding.
Sincerely,
[Your name]
Be sure to keep copies of any letters and documentation you send. Send the letter by certified mail and request delivery confirmation to have proof it was received.
Getting Help Negotiating Medical Bills
Negotiating with healthcare providers and collections agencies can feel intimidating. If you need help, consider hiring a medical billing advocate. They are professionals who can negotiate on your behalf to lower or eliminate medical debt.
Look for advocates who are certified by the Medical Billing Advocates of America. Their website offers a directory to search for advocates in your state. Advocates typically charge an hourly rate or take a percentage of the savings they achieve for you.
You can also contact a nonprofit credit counseling agency for assistance negotiating your medical bills. Reputable agencies are accredited by the National Foundation for Credit Counseling. They offer free or low cost services to help consumers manage debt and deal with collectors.
Assistance programs may also be able to help cover medical bills or negotiate debt on your behalf. Benefits.gov has a directory of over 1,200 assistance programs searchable by location and need.
Avoiding Medical Collections in the Future
While you focus on addressing existing medical debt, also take steps to avoid new collections down the road. Here are some tips:
- Understand your health insurance – know your out-of-pocket costs so bills don’t surprise you.
- Ask about costs upfront – request estimates before agreeing to procedures.
- Negotiate before services – try to get discounts upfront.
- Set up payment plans – pay directly through your provider.
- Scrutinize bills – watch for errors and discrepancies.
- Automate payments – set up auto-pay through your provider.
- Act quickly – follow up right away on bills before they go into default.
Building an emergency savings fund can help cover medical bills in the future. Even small amounts set aside each month add up. And having savings gives you flexibility to negotiate – you can offer lump sum settlements from your savings when negotiating medical debt.
Getting the right health insurance coverage and understanding your plan’s out-of-pocket costs can help minimize surprise medical bills. Plans with lower deductibles and copays reduce the risk of owing large bills for services.
Other Medical Bill Negotiation Tips
Here are a few final tips when negotiating medical bills in collections:
- Take detailed notes – document who you spoke with and what was agreed.
- Follow up in writing – send confirmation letters restating agreements.
- Prioritize bills wisely – deal first with the most urgent debts.
- Don’t ignore calls – work proactively with collectors to find solutions.
- Learn your rights – know protections under state and federal law.
- Consult experts – talk to financial advisors or consumer advocates.
- Watch the clock – debts fall off your credit report after 7 years.
Negotiating with collectors takes patience and persistence. But staying organized, being polite yet firm, and knowing your rights will help you settle medical debts and avoid further collections.
Dealing with medical bills and debt collectors can feel overwhelming. But take it one step at a time. Do your research, understand your options, and don’t be afraid to negotiate. With some diligence, you can minimize the costs and get your finances back on track.