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Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
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When you have to pay all or part of a hospital bill, you can negotiate the amount to pay. Hospitals are willing to negotiate because the rates they charge bear little relation to the cost of providing care . Typical markups range from 200 to 600 percent. A Time Magazine article offsite link from February 2013 provides details about the mark ups - and includes the following statement which is worth considering: ".... to the extent that most hospital administrators defend (ratesthat  they charge people who are uninsured, "chargemaster rates") at all, they maintain that they are just starting points for a negotiation. But patients don’t typically know they are in a negotiation when they enter the hospital, nor do hospitals let them know that.:

According to a Harris Interactive poll, more than sixty percent of people who negotiate their medical bills get a discount. 

If you are going to do the negotiating, take the following steps, each of which is described in another section of this article.

  • Step 1. Do your homework
  • Step 2. Find out who the decision maker is.
  • Step 3. Consider the timing.
  • Step 4. Think about what to say to convince the creditor to say "yes"

If negotiating is not one of your strengths, ask a friend or family member to do it for you. IIf you have one, ask your attorney and/or financial planner to negotiate for you. There are also companies that specialize in negotiating hospital bills in return for a payment of percentage of the savings. To learn about people and companies that specialize in negotiating medical bills, click here.


  • There is no need to put up with aggressive collection efforts. For more information about your rights with respect to debt collectors, click here.
  • If you have health insurance, but need a medical procedures that is not covered by your health insurance, let your doctor know before agreeing to the procedure that you are paying yourself, and that you want the lowest price because money is a concern. 
  • If you are experiencing a financial crunch of any kind, click here for tips for dealing with it.
  • To learn how to review a hospital bill, click here.

How To Negotiate A Hospital Bill In Four Steps


Look for errors in the bill

  • Look for errors on your bill. Studies show that hospital bills are likely to contain errors. (For more information, see How To Check Hospital Bills.)

Find out if you can get the hospital to wipe out all or part of the bill because of Hill-Burton or under what is generally referred to as a hospital's charity policy.

  • Ask a social worker or a supervisor in the finance department if the hospital is subject to Hill-Burton.  Hill-Burton is a government program requiring health care facilities which received government money to build or renovate their facilities to provide a minimum amount of free or low cost care. Perhaps at least part of the bill can be considered to be a Hill-Burton expenditure which would either mean it is free or charged at a low rate. For answers to frequently asked questions about Hill-Burton, click here.
  • Ask if you qualify for financial assistance under the hospital's charity care policy. The Wall Street Journal reported on a man who had equity in a house and a pension plan, yet he still qualified for the hospital's "charity care policy."  "Charity" may not be a word you're used to thinking of when thinking about yourself. However, the key is reducing or eliminating your debt - not worrying about what it is called.You can negotiate the amount you are required to pay, the amount of the interest rate on the outstanding balance, and/or the period of time you will have to pay the bill.

Find out if you can qualify for Medicaid ("Medi-cal" in California)

  • Ask whether Medicaid in your state pays for services already received ("retroactively.") Medicaid coverage may start retroactively for up to 3 months prior to the month of application, if the individual would have been eligible during the retroactive period had he or she applied then. 
  • For information about Medicaid, click here.

Find out what is a fair price for the service or product

Hospitals, like most health care providers, have a series of price structures that apply to different types of patients. Uninsured patients generally pay the highest rate. Before you negotiate with a hospital, find out what a fair price should be in your area (prices vary across the country). Following is a guide about how to find a fair price in your area:

  • If a service is involved:
    • Check on line for local prices. For instance:
      • has a consumer-friendly tool to research hospital charges. At y offsite linkou can choose a hospital service and enter your location. The result will be the average charges for the service and the average medicare papyment in your location.
    • If one of the above does not include the service you need or used:
      • Ask your doctor for the CPT codes on procedures the doctor ordered for you. CPT codes are the numeric codes used by the American Medical Association to identify health services. Once you have the CPT code, use it to look up the Medicare reimbursement rate for the procedure in your area at offsite link
      • Call other hospitals in your area to learn what they charge to patients in your situation. Also ask what is the lowest they charge for the service you received and who receives that charge. They may not tell you, but it can't hurt to ask.
      • Check companies that help with bill reviews such as Medical Billing Advocates of America offsite link
  • If you received or used a product, find out what it cost the hospital. For example, if the hospital charges you $10 for a box of xyz, you may find from a local supplier or from a bit of research on line, that bulk purchasers of boxes of xyz only pay $.50 a box. Keep in mind that what a hospital charges for a service, and what the service costs, generally have little to do with each other. Much hospital pricing appears to be arbitrary or based on historical rather than current costs.

Think about what you can afford to pay and when

The sooner the hospital  believes it will be paid, the more likely it will be to agree to a lower amount. If you can agree to pay whatever is due within 30 days of the agreement, you are likely to get the best deal.  Look at How To Deal With A Financial Crunch for fund raising ideas.

Consider how much you can reasonably pay now, and how much you can pay on an installment basis (such as every week or every month) - perhaps starting in a month or two. 

If you do not know what you can afford, consider creating  a Cash Flow Statement which shows your income and outgo, and a a Budget to help you reduce expenses. For tips about increasing your income, see: How To Increase Your Income If You Are Working or How To Increase Your Income If You Are Not Working. Look at How To Deal With A Financial Crunch for fund raising ideas.

Think about your limits

Set in your mind a maximum dollar amount which you will not agree to pay above. Understand that if there is no agreement, the hospital will at least continue to bill you, and may make serious collection efforts including a lawsuit. It may also report the unpaid debt to the national credit bureaus which would affect your credit at a time when credit is important. (To help understand the importance of credit after a diagnosis, click here.)

Keep in mind that once you reach an agreement, it is important to hold up your end of the bargain.


Only negotiate with a decision maker - the person who can not only change the amount of the bill, but make the size of change you desire.

The decision maker is not likely to be the first person who answers the phone or who you see. It may be a supervisor or possibly the hospital's chief financial officer. If you have a question, ask if the person has authority to negotiate the amount of the bill. If not, who is the person with the authority?


It helps to time your negotiation toward the end of a month or the end of a quarter when the hospital wants to clean up its books and reduce total outstanding receivables.


When negotiating anything, always keep in mind the other person or entity's interests. In general, the hospital's interest is to get as much money for each bill as it can. At the same time, it understands that it must deal with economic realities.

Think about whether you or a close family member were in the hospital before and how much the hospital was paid. The more that was paid, and the more that is likely to be paid again, the more the hospital will want to keep your business.

Decide how much you are willing to tell about your health condition and the consequences. The hospital already likely has your medical record, but the finance department does not necessarily have this information. 

If you are experiencing a financial crunch, explain your financial situation. If you've completed some financial planning tools such as a Budget or a Cash Flow Statement, use them. If a deal is reached, you may be required to provide proof of your finances beyond a statement you create. Every creditor knows you can't get money if there's none there. 

Let the hospital know that bankruptcy is an alternative if it is. The bankruptcy process would delay the hospital's receiving payment -- and the payment may end up being pennies on the dollar.

It is best to have a rationale for a dollar amount you ask for. For example: Consider offering to pay:

  • The amount other hospitals in your area charge
  • The CPT price plus a reasonable amount, such as 10% of the CPT price.
  • Ask the hospital's financial staff for it's "charges-to-cost" or "markup" ratio. This represents the difference between the hospital's costs and what it charges a patient. The national average has been as much as three to one. You can negotiate for cost plus a percentage, such as 25%.  
  • The hospital's price less a discount to take account of how much the hospital would have to pay a collection agency if you don't reach agreement - and how much time that would take. Collection agencies generally receive at least 30% of the collected amount.
  • If you received the use of products, ask the hospital for its "charges-to-cost" or "markup" ratio. This represents the difference between the doctor's costs and what is charged a patient. The national average has been as much as three to one. You can negotiate for cost plus a percentage, such as 25%.

If you can agree to pay whatever is due within 30 days of the agreement, you are likely to get the best deal. Look at How To Deal With A Financial Crunch for fund raising ideas.

Consider suggesting a barter system where you pay off the remaining debt with services you provide to the hospital. It's a win-win situation: the hospital gets the services it needs and you get your bill paid off. (If the hospital cannot use your services, perhaps you can barter your services to another person who needs them, who in turn can provide needed services to the hospital. Information about bartering is in the document in "To Learn More").

Do not promise to pay what you can't. You may need to return to the hospital.

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You Do Not Have to Put Up With Aggressive Collection Efforts

Some hospitals or their collection agents have become very aggressive in collecting outstanding bills, making harassing telephone calls at late hours, threatening to sue and other techniques. 

You can legally require creditors to stop harassing you. (For more information, see the document in "To Learn More").

Do not be afraid to complain directly to the hospital about these techniques, especially if you have tried or are trying to negotiate the bill or if the actions go beyond those permitted in collection of a debt. 

If you do not get any satisfaction complain to your state association which oversees hospitals or to the Attorney General's office of your state. You can find your AG's phone number at the National Association of Attorneys General: offsite link


Written with:

Herbert Spiers, Ph.D.
New York, NY

To Learn More

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