How to Negotiate Medical Bills in Collections

How to Negotiate Medical Bills in Collections – Overview

Do you want to know how to negotiate medical bills so you can settle for less? You can choose the strategies below.

These strategies can compel collections agencies or healthcare providers to consider reducing the amount owed on medical bills.

You can potentially reduce the total amount owed on medical bills through negotiation tactics.

For example, knowing your legal right to challenge prices and seek loan forgiveness is a great strategy. Secondly, agreeing to pay a lower lump sum is highly recommended.

The trick is to offer enough money to compel the lender to agree to a debt settlement. This requires demonstrating financial hardship and drafting effective legal agreements.

Alternatively, you can agree to a monthly payment plan too.

Let’s examine the steps you can take if your unpaid bills are sent to a collection agency for loan recovery.

How to Negotiate Medical Bills in Collections

As a consumer, you should investigate every tactic that can help you negotiate a lower medical bill amount. This is especially true if your unpaid medical bills have been transferred to a debt collection agency.

You should take every opportunity to lower the total owed amount before agreeing to a legal settlement. This is important as unpaid medical bills can eventually affect your credit score.

Here are some tips for negotiating medical bills in collections:

1 – Seek loan forgiveness

Seeking reductions or forgiveness for unpaid medical bills can be part of a negotiation strategy with healthcare providers or collections agencies. This is great for those who belong to low-income households and for people without health insurance.

Many hospitals offer charity care programs to assist eligible individuals with their medical bills. These are designed to help the underinsured, uninsured and those ineligible for government programs such as Medicaid.

Individuals who fulfill asset and income requirements can receive financial aid to cover the cost of essential medical services.

This initiative helps pay bills for outpatient and acute care patient facilities.

2 – Challenge pricing

Challenging healthcare service prices is a relatively new medical bill negotiating strategy.

You can easily compare every invoice to a standard pricing schedule that is available publicly. This is an effective way to find errors in medical invoices.

The Hospital Price Transparency rule, requiring hospitals to provide clear pricing information, took effect in the United States on January 1, 2021. Under this rule, every healthcare provider in the United States is required to provide clear and detailed cost information online.

This information is to be provided as a comprehensive machine-readable file and includes all services and items. The invoice should also display services offered in a consumer-friendly form.

3 – Know your legal rights

It is incredibly important to learn your legal rights before negotiating medical bills in collections. Several consumer-friendly laws can benefit you incredibly well.

Some of the important legal rights you need to know before negotiating medical bills in collections include:

The No Surprises Act, effective since January 1, 2022, this provision of the Consolidated Appropriations Act of 2021 is designed to shield consumers from unexpected medical bills.

Under this, the patient may not be responsible for certain healthcare providers’ charges. This is for healthcare providers participating in particular insurance plans.

Statute of Limitations – The Statute of Limitations (SOL) for medical debt varies by state and can impact the collection of aged debts but should be understood accurately to avoid making payments that may restart the SOL clock.

It provides an effective legal defense against a collection agency that has lodged a lawsuit for unpaid medical bills. This strategy works when the state-specified period has expired.

You will need to be careful when discussing the debt with the collection agency. For this strategy to work, always try to avoid acknowledging the debt in writing or making a payment to the collection agency.

Credit Reports – Medical debts typically are reported to credit bureaus after a 180-day waiting period to allow for insurance payment processing, and understanding these rules can inform negotiation strategies.

Dispute Letter – You can also send a medical bill dispute letter within 30 days of first contact with debt collectors. This also provides bargaining leverage when negotiating medical bills.

The Fair Debt Collection Practices Act (FDCPA) requires debt collectors to validate the debt and verify the debt with the consumer upon request.

The collectors are also responsible for mailing the original lender’s name and address. Failure to comply may make the collection agency liable for statutory damages.

4 – Payment plans

Developing a payment plan is also an efficient way to pay off medical debt, especially with collection agencies.

However, you should agree with payment plans only after checking that bill amounts are valid and that you have used all other legal and insurance appeals.

Individuals with good credit scores can choose two different ways to create payment plans:

1. Offer instant partial payment for a discount. You can borrow this lump sum of medical credit cards, personal loans, etc.

2. Create a monthly payment plan that is budget-friendly and allows you to pay off owed medical debts.

Settling Medical Debt Collections

You can also choose to agree to pay off a fraction of the total unpaid amount if you fulfill specific criteria, such as:

Experiencing financial hardship with a negatively marked credit report

Actively employed with a regular income that is sufficient to cover only daily living expenses

Here are three steps to settle medical bills in collections:

Consolidate all bills – The first step is to merge selected unpaid bill payments into an escrow account.

You will have to offer something valuable as immediate partial payment. This entices the lender to forgive a significant portion of the unpaid amount. You can choose to hire a debt settlement company to manage this process.

Demonstrate financial hardship – The second step is to demonstrate financial hardship. The lender should realize that your bankruptcy will prevent them from collecting any portion of the unpaid medical bills.

Offer a settlement – The third step is to pay around one-third of the total unpaid amount. This can be done using the funds collected in the escrow account.

Lenders are more likely to accept this partial payment offer if the borrower effectively demonstrates financial hardship. You can also hire a debt settlement company to ease the negotiation process with the collection agency.


There are several different ways to negotiate medical bills in collections.

Follow the advice above and know all your legal rights concerning settling unpaid medical bills.

Don’t let medical and healthcare services seem burdensome; live a healthy life.

See Also

Organizations That Help Pay Medical Bills

Medical Bill Forgiveness

Current Version
January 3, 2022
Written By
Shubham Grover
March 29, 2024
Updated By
Andrea Morales G.

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