Negotiating Medical Bills

[COlady]

I'm wondering if anyone has an advice for my situation:

My twins were in Children's Hospital for 10 days with RSV.  Approximately $92,000 was billed to insurance (Cigna if it matters), a large chunk was written off as contractual adjustment, and we are responsible for the out of pocket maximum per our insurance policy of $11,000.  I've never navigated large medical bills before so this is new to me. I read that many times they will settle for 75% of the balance due. I called and offered 75% of the balance 100% paid in full today.  They laughed at me and said they're unable to negotiate on a balance that has been billed through insurance and that I've already been given a discount through the contractual adjustment.  I asked to speak to a supervisor and she offered me a one-time 10% discount.  I said what's the alternative? Can I setup a payment plan? They said I could pay as little as $200 per month with no interest or additional fees until the balance is paid in full (with no 10% discount)...which would take 55 months. I said but as a business, wouldn't you rather have the cash today, right now at 75% of the balance due. She said that's not how they work.  (from a business standpoint I would take the cash and run....how do they know if I'm good for the $200 per month for 55 months).

I haven't received a detailed bill only a summary of totals so I requested that and will comb through the bill but I wouldn't even know what to look for. If I don't see anything way off base I will probably just call them up and settle for the 10% discount. Anyone have any advice? We have the money sitting in an HSA account to pay this in full but I plan on putting it on the CC for the cash back and then reimbursing myself from the HSA.  Anything I'm missing here?

[kendallf]

My advice: unless you're prepared to leave the bill unpaid for months and possibly take a credit hit to gain some negotiating power, take the 10% discount, pay it, and get on with life.  Or, you could decide that the benefit of leaving your HSA money invested is worth the 10% and just begin monthly payments.

I went through a bunch of medical bill negotiation this year for my mother (my step father passed away).  If you pay anything at all (I didn't ask the creditors what they'd accept, I just picked a number) they will happily take it and, in most cases,not send it to collections.  Negotiating for reduced payments or a total write off was possible after I stopped her payments on the larger bills but if I sent in any payment at all they seemed to just keep billing for the full balance.

As I mentioned above, you might consider leaving the HSA money alone and paying monthly payments, even forgoing the 10% discount.  The tax benefit and investment gains on the HSA will probably be worth more.  When you've spent that money in the HSA, the tax sheltered growth on that money is gone; you can't refill the pot until next year. 

I hit our HDHP's max OOP this year as my wife had shoulder surgery.  I paid the bills out of pocket (using a rewards CC) and left the HSA invested. 

[woodnut]

My family hit the max out of pocket twice ($6000) with 2 separate once in a life time events (hopefully) in 2012 & 2013.  I've always assumed that negotiating medical bills was for self pay, not when insurance is involved.  In fact I've had coworkers & family tell me they had pre-planned procedures done cheaper with self pay vs the negotiated insurance rate.  Your 10% discount is better than I did, although it never occurred to me to even try negotiating.  Hopefully there isn't a next time, but I'll keep this in mind.

[forummm]

You almost certainly wouldn't have been able to negotiate the price for the entire package below $11k anyway. And now you've hit your OOP max for the year, so everything else is free. Unfortunately hospitals charge a LOT. I think the 10% discount is a nice benefit for you.

I hope your kids are OK now. Best wishes.