Reduce Your Medical Expenses by Negotiating

Saturday, February 15th, 2014 By

Yes, you really can negotiate the cost of medical care

Image from flickr

Image from flickr

Although many people are not aware of it, the medical industry is one of the few American industries where negotiating the price is not only acceptable, but common. The reason many uninsured or underinsured people are quoted higher prices than insured individuals is because the price for many services has already been negotiated down by the insurance companies and HMOs. However, this practice is not limited to major institutions. Individuals can — and do — negotiate the price for particular services on a regular basis and this can result in significant savings.

Negotiating can save you up to 60 percent

According to Consumer Reports, only about thirty percent of Americans even try to negotiate with medical care providers; however, of those who try, 93 percent are successful at least once. The average savings are between thirty and sixty percent of the original amount owed, though there are many stories of people saving as much as ninety percent through effective negotiation. There are no guarantees that negotiation will get you a discount, but experience shows that most people who make the effort are successful to some extent.

Step One: Negotiate in advance

The first step to negotiating medical expenses is to negotiate terms in advance for planned medical visits and examinations. Due to problems with delayed payment, many medical service providers offer “prompt pay” discounts that can reduce your medical bill by as much as ten to twenty percent. These discounts are usually reserved for those who are able to pay for planned medical services at the time of the visit. However, many providers will also offer a prompt pay discount to those who are able to make large, although partial, payments on the spot.

Step Two: Talk to the CFO

The next step is to speak with the provider’s Chief Financial Officer (CFO) after you have received your bills. More often than not, just asking the CFO for a discount will get results. However, to do this effectively you have to know what is reasonable from the provider’s point of view. For this reason, you should know the average cost in your area for the services provided and you should ask for a price in that range. You can find out what the normal charge for various services is by looking at websites like and many insurance company sites.

Step Three: Discuss payment options with the billing department

If you get a discount from the provider’s CFO, you probably will not be able to negotiate further discounts from the billing department. However, you may be able to negotiate an interest-free payment plan. The interest that accrues on medical expenses paid over time can be significant. Negotiating a payment plan that does not include interest will greatly reduce the amount you ultimately pay.

You have nothing to lose and much to gain

Contrary to the impressions of many people, most medical service providers are willing to negotiate and rarely expect everyone to pay every cent originally charged. In fact, many providers specifically budget for a lower repayment than they initially bill. For the consumer, there really is nothing to lose by trying to negotiate discounts and reasonable repayment terms. The worst case scenario is that the provider will refuse to grant a discount. But negotiating is worth the effort. As Consumer Reports has documented, 93 percent of those who try do in fact get a discount.

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This post has 3 comments

  1. Franrose says:

    Great article, Kevin! It's ridiculous how much money we pay to keep our health in decent shape. My husband has a chronic illness and is constantly in need of medical attention. His medical bills are absolutely ridiculous. I swear they will charge you an arm and two legs just so they can add more to your debt. I guess there really is nothing more you can do but pay up or talk it down.

  2. Bobby says:

    Great information. I never thought I could negotiate with my physician–the subject of money seems so foreign to the confines of an examination room, but it makes sense. *Everything* is up for negotiation.

  3. Daren Tomey says:

    Kevin, great article. Medical bills and accrued medical debt are major challenges for millions of Americans and it is only compounding each year. This is not limited to the uninsured either, which is generally the key focus on coverage.

    In 2007, 66% of the adults with employer sponsored insurance and 59% of adults with individual insurance experienced difficulty in accessing the health care they needed due to medical costs and accrued medical debt. This meant that they did not fill prescriptions; skipped medical tests, treatments, or follow-up recommendations; had a medical problem and did not go to their doctor or clinic; or did not not see a specialist when they or their physician thought they needed one.

    As you can imagine, this just compounds issues for these individuals on a personal and professional level, often causing them to miss more work and/or suffer a less than desirable quality of life.

    It has been reported that the longer an individual puts off seeing a doctor or does not participate in wellness initiatives, they become more expensive from a health care coverage standpoint.

    Health Payment Advocates is a financial advocacy company which resolves problems and confusion surrounding the “patient portion” of medical bills by negotiating on the patients behalf to either reduce their out-of-pocket responsibility or establish a payment plan based on the patients financial situation.

    Thanks again for the article Kevin, more needs to be written and communicated on this growing burden that affects all Americans.

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