Strategies to Lower Your Medical Bills

With health care costs rising, it’s natural that more people want to lower their medical spending. According to Consumer Reports, only 31% of Americans try to negotiate the price of medical bills, but those who do usually succeed in saving big money. These are some methods that will help.

Understanding Medical Charges and Discounts

1. Become familiar with routine discounts. Doctors and hospitals typically give discounts of as much as 60% to Medicare, Medicaid, and insurance companies. As an individual, you may have less leverage than the big payers, but you can usually save significant money by negotiating.

2. Look for the CPT code. Current Procedural Terminology (CPT) codes are the standard codes maintained by the American Medical Association. They’re what billing departments use to determine the charges for any procedure. Once you know the CPT codes, you can comparison shop.

3. Know that it’s okay to negotiate. Many health care providers are getting used to patients taking a more active role in controlling their spending. Millions of people have lost their insurance coverage along with their jobs. Even those who are insured are often paying more in out of pocket charges than ever before.

Selecting Lower-Cost Treatments

1. Talk with your doctor. While billing departments are important, it’s your doctor who orders the services so let them know your financial limits. Avoid taking it personally if you encounter any resistance. Physicians may feel uncomfortable discussing money and may assume that your insurance covers more than it really does.

2. Opt for generic drugs. Generic drugs are any easy way to save money. Most contain the same ingredients as the brand name formulas but they cost much less.

3. Identify discretionary services. If you’re concerned about expensive lab tests and prescriptions, ask if any of the services are discretionary or could be done later. Also, by reviewing your medications, your doctor may find some medicines that you can discontinue or change to lower-priced alternatives.

Negotiating Payments

1. Make up-front payments. Offering to pay by cash or check in advance is usually the best way to get a sizeable discount. In exchange for bypassing insurance reimbursements or collections agencies, many providers will cut your bill by 20% or more.

2. Base your proposed payment on Medicare charges. Medicare payments are a great starting point for calculating your own expenses. Once you know your CPT code, look up the Medicare payments in your geographical area at the American Medical Association website or call around to the billing departments of local medical centers. Paying 25% more than Medicare is reasonable for most procedures.

3. Review your bills. Industry experts estimate that up to 85% of medical bills contain one or more errors. Ask for itemized bills and review them carefully. It may be helpful to arrange conference calls with the hospital and your insurance company to conduct a full analysis.

4. Ask about interest free payment plans. Obviously, paying by credit cards costs a patient more in the long run if interest accumulates. The provider also has to pay the transaction fees so they may be willing to give you a zero interest payment plan if you’re paying cash.

5. Hire a medical advocate. Medical advocates charge a fee for their services but the savings can be worthwhile, especially for large hospital bills. Typically, you’ll pay a flat fee or 25% to 35% of the amount by which they reduce your total bills. You can find advocates in your area through free online directories at organizations like the National Association of Healthcare Advocacy Consultants.

Learn how to get discounts on your medical bills so you’ll be in a better position to afford the care that you and your family need. By shopping around and offering up-front payments, you could save thousands of dollars.