Inside Money: How to handle medical bills


Employers are looking to save money by changing (er, shrinking) health benefits, and that means bigger co-pays and deductibles for patients. Then, there are the unemployed, who often have no health insurance at all. This means New Jerseyans may be facing higher out-of-pocket medical bills.

Rather than simply accepting an eye-popping tally for health services, go proactive. Everything is negotiable. Even medical bills. Here’s how to do it:

1. Ask for a payment plan

Hospitals and doctors want to be paid for the services they provide, and, of course, they’d like the payment as fast as possible. But like any other creditor, they’d rather be paid slowly than not at all. When you receive a whopper of a bill, ask about a payment plan — before the bill is past due. Explain why you need one, giving proof of your income, if necessary, and offer to make monthly payments until the bill is satisfied. Try to negotiate the lowest possible monthly payment, so you’re more likely to meet the obligation. And make sure you don’t agree to terms you can’t keep. If you’re late or you miss a payment, the office may demand payment in full immediately.

2. Offer to pay upfront

Before you have an appointment or a procedure, ask for a meeting with the billing department. Ask for details about the costs for the services you need, and then offer to pay upfront for a discount. Insurance plans pay negotiated lower fees for most services, so another strategy would be to find out what some plans or what Medicare pays for the service. To research Medicare pricing, ask the provider for the CPT (Current Procedural Terminology) code for the service.

For hospital bills, ask for the Healthcare Common Procedure Coding System (HCPCS). To learn pricing, go to the American Medical Association’s website (, enter your geographic area and the code.

Use that as a starting number, explaining that you know the provider already accepts that amount for Medicare. Chances are the Medicare rate is the lowest the provider will accept, so expect the negotiations to land somewhere above that price, but lower than the original fee.

Again, providers want to get paid, and many will be glad to offer a discount in exchange for an early payment guarantee. If the provider isn’t so sure about a discount, remind the representative that the practice will save money on billing because they won’t have to send you one.

3. Ask for a review of the bill

Billing mistakes happen. Boston-based health care advocacy group the Access Project estimates that 80 percent of medical bills have errors. Even if the real number is only a fraction of that, it’s too many.

Review your bill, and even if it appears to be correct (however outrageous the prices for services may seem), call the billing department or hospital audit department and ask for a review. This is especially important for hospital stays when you might receive services from several different medical practices. The hospital will have an advocate who will make sure the charges on your bill are correct.

If you want a more independent review, it will cost you. You can find a medical billing advocate through Medical Billing Advocates of America ( Expect to pay either an hourly fee or a percentage of the amount they save you on the bill.

4. Apply for assistance

Talk to your provider or the billing department about state programs that might help you. Ask about:

Hospital Care Payment Assistance Program: This provides free or low-cost care for lower income patients. Call (800) 367-6543 or visit

New Jersey Family Care: This program gives free or low-cost health insurance to lower-income families. Call (800) 701-0710 or visit

Catastrophic Illness in Children Relief Fund: This gives eligible families money for all kinds of medical care and expenses. Call (800) 335-3863 or visit

Learn about other state health services at the Department of Human Services website at

Also, ask the hospital if it has a charities fund or other program for which your family may qualify.

5. Toss in some emotion

Medical billers are people, too, and they understand the stress of illness, unemployment and other financial troubles. Be prepared to show tax returns, foreclosure notices — whatever it takes to prove your precarious financial state. Don’t put on an act, but honestly explain the challenges you and your family are facing.

And don’t forget, medical expenses are deductible on your federal tax return in 2011 and 2012 if costs exceed 7.5 percent of your adjusted gross income and you itemize. (That threshold goes up to 10 percent in 2013.)

On your New Jersey return, you can take the deduction if expenses exceed 2 percent of your gross income.