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Can You Negotiate Medical Bills in Collections? What You Need to Know

Got medical debt? Research shows that roughly 137 million Americans are facing financial hardship related to medical debt.


If you’ve been wondering can you negotiate medical bills in collections, the short answer is yes, you often can. If you are successful, you might get your medical debt reduced or receive more manageable repayment terms.


The cost of healthcare

There are two primary ways to negotiate debt: you can either go the DIY route or consult a professional medical bill advocate. 


Medical costs are high in the US, and they can strike out of nowhere. If you don’t have the right health coverage or cash flow to pay out of pocket, medical debt can be crippling. Reports also reveal that medical debt is the number one reason for bankruptcy in the US. 


Fortunately, filing for bankruptcy isn’t the only option if your medical debt is with a debt collector. 


Ready to find out how to negotiate down your medical debt? Keep reading to learn how to negotiate with debt collectors, as well as a few other essential tips for managing medical debt. 


What Does It Mean If a Medical Bill Is With Collections?


What does it mean when a bill is in collections? And how does debt end up with a collection agency?


If a medical bill has reached collections, this means that the health care provider is no longer collecting the debt. Instead, they have turned over the debt to a collection agency. 


This usually happens if you have not been making payments on the medical debt. However, debt you are paying off can also go to collections on occasions where you are not meeting the terms of your payment agreement.  


Hiring a Medical Bill Advocate


If you’re asking yourself can you negotiate medical bills in collections, the good news is that yes, you often can. There are two primary ways of doing this. The first is to hire a medical bill advocate.


A medical bill advocate can help you negotiate with the debt collection agency that has purchased your debt. They can also evaluate your debt and go through it to catch things like:


  • Errors
  • Duplicate charges
  • Unreasonable charges
  • Overcharges
  • Fraud

Besides this, a medical bill advocate can also ascertain whether your insurance has covered as much as it should have. If not, they can query this and negotiate with your provider to ensure they cover everything you’re entitled to under your policy. 


Like lawyers and doctors, medical bill advocates often have different areas of specialty. For example, while some specialize in negotiation, others may deal primarily with tracking down billing and insurance errors. 


If your debt is already with collections, then in most cases, you should look for a medical bill advocate whose strong point is negotiations. 


How to Find a Medical Bill Advocate


To find a medical bills advocate you can start by visiting the website of the Alliance of Claims Assistance Professionals. You can also ask your local hospital’s billing department for recommendations. 


Asking around with family and friends is another way you could get a recommendation. 


How Much Does A Medical Bill Advocate Cost?


Another critical point is fee structures and costs. Fees vary between medical bill advocates and can differ according to location, experience, etc. 


The way that medical bill advocates charge can also vary. Some medical bill advocates charge per hour, some on a per case basis, and others on contingency.


Hourly rates can range between roughly $75 to $350. Contingency rates are usually between 25%-35%.


If you want to know outright what a medical bill advocate’s services will cost, per case billing will give you the most precise idea. In addition, there is less chance of the total cost escalating beyond what you anticipated. 


On the other hand, per hour fee structures can help to ensure that medical bill advocates do a thorough job and pursue every avenue to reduce your medical debt. 


Contingency fee structures can be advantageous if you don’t have the money to pay upfront. It also motivates advocates to negotiate your debt down as much as possible, as this affects how much they will earn. 


Either way, this can be a lot of money, so it’s important to consider the cost of an advocate against the amount of the debt you are looking to negotiate and make sure that the payment makes sense for you before entering into any kind of agreement.


Negotiating Your Medical Debt on Your Own


If you don’t want to hire a medical bill advocate, you can also negotiate medical debt yourself. 


Because medical bill advocates are professionals, they may be able to secure a more significant reduction for you. However, this doesn’t mean that negotiating your medical debt isn’t something you can try. 


Remember, debt collectors typically purchase debts for a fraction of their total value. Because of this, they can often afford to negotiate with you. 


Not only can debt collectors generally afford to negotiate, but it is often in their best interests. Even if you pay only half of what you owe, it’s better for the debt collector than non-payment.


If they think there is a slim chance of you paying the debt, then there is a possibility the debt collector will be open to negotiating. 


Note, however, that this is not certain and depends on the situation.


Either way, debt collectors are usually tough people to talk to, and they may be rude to speak with and/or try intimidation tactics. Even if they do, it’s important to keep a cool head and be reasonable if you want to negotiate.


Check Your Bills for Errors


Before you start negotiating with your debt collector, get all of your medical bills together. Then, if you have misplaced any, you might be able to ask your healthcare provider for new copies. 


Then go through all of your bills and check for errors. Sorting out medical billing errors once the debt has already gone to collections can be tricky, but it is still worth a shot. 


While checking your bills, also try to ascertain whether any come from a non-profit hospital. Non-profit hospitals are required by the Affordable Care Act to provide discounted or free care to low-income patients. If a non-profit hospital does not do this, it risks losing its tax-exempt status. 


Unfortunately, nearly half (45%) of nonprofit hospitals regularly send medical bills to low-income patients who could qualify for charity care.


Work Out How Much You Can Pay


Once you are sure your bills are error-free, sit down and consider how much of the debt you can realistically afford to pay and over what time frame. 


The last thing you want is to negotiate a reduction or new repayment terms and then not meet the agreement. Instead, try to be as honest with yourself and the debt collection agency as possible.


Start Negotiating


To start the process, ask your debt collector if they are open to negotiation. Make it clear to them that you intend to do your best to pay the debt but cannot meet the total amount or current repayment terms.

Offering the debt collector a lump sum in exchange for full settlement of the debt might be the most effective option if you can afford it. But, failing that, you can also try to negotiate better payment terms along with a possible deduction. 


While negotiating, you can request that the creditor reports your debt as paid in full to the credit score agencies. If you negotiate your debt down and then settle it, the last thing you want is for this to be reported as a partial payment. 


Lastly, during your communications, make sure you remain calm, logical, and businesslike. 


Once you have agreed with the debt collection agency, get the settlement in writing. Then, be sure to adhere to it.


What Not to Do if Your Medical Bill Is With Collections


If you have medical debt that’s with collections, don’t ignore it. 


Although medical debts can feel very daunting, not thinking about them won’t make them go away. So instead, the best strategy is to face the debt head-on. 


The first step in paying off debt is to take a tally of it and start planning to reduce it. If you can get the total reduced via negotiations, this is a great start. 


Once you start taking action, medical debt often feels a lot less frightening than if you leave it unattended. 


Another thing to avoid is allowing debt collectors to bully you. There are certain things debt collectors aren’t allowed to do by law. For instance, they can’t threaten to have you arrested, publicly shame you, or harass you. 


If you’ve requested a debt collector not to call you at work, the law requires them to respect this request. However, if they continue to place calls to you at work, this is unlawful. 


Ways to Settle Medical Debt That’s With Collections


Negotiating medical debt that’s with collections can be an effective way to make it more manageable. However, even reduced medical debt can be hard to pay off if you have a tight budget. 


Here are a couple of avenues you can look into for paying down medical debt with collections. 


One of the first things you can do is check for any local or state programs that offer assistance with medical bills. The best place to start is by inquiring with your state’s social service agency. 


To free up income to put towards your debt, you can also see any other assistance or benefits programs you might be eligible for. For instance, you might qualify for help with energy costs from the Low Income Housing Energy Assistance Program, depending on your situation.


To learn more about getting assistance with your bills, check out this blog post


A less appealing option you may be able to consider is taking out a medical credit card. Medical credit cards are specifically designed for medical bills and often come with low or no interest rates for the first 12 months. 


You can also look into zero interest credit cards, which offer a 0% interest rate for a specified initial period. 


Be very cautious with these two options, however. Although they sound attractive, there are some downsides. For one, 0% APR credit cards come with certain risks and stipulations. 


Second, 0% rates aren’t permanent. If you don’t pay off the card within the specified no-interest period, these types of credit cards can cost you heavily in interest and draw you into a debt cycle. 


Consider your options carefully before going this route.


Can You Negotiate Medical Bills in Collections? Yes, You Can!


Can you negotiate medical bills in collections? Yes, you most certainly can in the majority of situations. Whether you choose to use a medical bill advocate or negotiate yourself, it’s worthwhile to try and get your debt total reduced. 


What’s more, in the process, you might discover billing errors that are erroneously inflating your debt. 


Besides negotiating with your debt collection agency, you can also look into various assistance programs to help you cover your monthly living costs. Receiving help with other bills and expenses is a great way to free up income to pay down outstanding medical debt and ease the burden. 


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