Are medical negotiators legit?

August 25, 2013 9:30 AM

Are sites like this legit? Basically, they promise to negotiate your medical bills; if they save you money, they take a percentage of it (often 35% of your total savings). If they're unable to help you save, they don't charge anything. I have a super-high deductible insurance plan, and have long known that most bills can be lowered by me calling the billing department and asking. I've had bills lowered any where from 1-40%, with the knowledge that the remaining amount generally must be paid in full relatively quickly. Has anyone used a site to negotiate for them, and if so, did you feel like their negotiating was better than what you could have done on your own? Note: This is hypothetical, as I do not currently have any large medical bills looming. Assume that I do have the resources to pay a large bill in full if it saves a hefty percentage in the long run.
posted by csox to Work & Money (6 answers total)

I don't know about that particular company, but there are a lot of "debt settlement" scams out there. If you feel you can negotiate on your own, then that's what I would do. Generally this kind of stuff doesn't take any particular specialized knowledge -- you just have to have it together to make the calls and send the letters. I'm skeptical that they provide much value to consumers, even if they are not actually fraudulent. Here's some more information from the FTC.
posted by yarly at 11:19 AM on August 25, 2013

Someone will probably come in with more knowledge comment further on this, but in general i don't trust any sort of "we manage your money!" related services that take some kind of percentage off the top rather than just billing you up front.

See also: fee based financial consultants Vs the ones who aren't, but try and herd you in to dumb crap that benefits them and questionably you.

I would much rather pay a fee up front, and i'd expect it to be in the mid-high hundreds. It would make me actually believe the person involved gave a crap rather than that they were just trying to leash up as many suckers as they could to their contract.

Something about the percentage thing just sounds skeezy to me. This is not some area of expertise to me however, so i welcome someone with more knowledge to smack down my opinion and attitude here.
posted by emptythought at 11:56 AM on August 25, 2013

I'd use an attorney with experience in negotiating with insurance and health providers who worked on an hourly rate basis.
posted by randomkeystrike at 7:08 PM on August 25, 2013

Best answer: Negotiating large medical bills is a common thing for insurance companies and other entities that have to pay doctors and hospitals. There are many services that they use and they work pretty much like the one you mentioned where they take a percentage of the savings. They don't just call and ask to pay less, though. They have data showing the average amount paid for similar services in the area as well as checking the medical reports to see that what was billed actually matches what was performed. They also ask for "prompt pay" discounts, allowing the provider to get paid in 10-15 days rather than 30-90 days.

These guys sound like they do a similar thing for individuals who aren't insured or who have been "balanced billed." (link is to a PDF from NCN explaining balanced billing and negotiation.)

tl;dr - This type of service is legit and is used by insurance companies all the time. I am not aware of this particular company but if it works the same way, you could save substantially more on a large bill than if you tried to negotiate it yourself. The suggestion to use an attorney is probably the best way to go.
posted by sciatica at 7:54 PM on August 25, 2013

High-fee debt settlement scams, from Consumer Reports. Caveat debtor.
posted by dhartung at 2:51 AM on August 26, 2013

There are legitimate services that negotiate hospital bills. I heard about one on a recent podcast, maybe Planet Money? IIRC there was an interview with someone who helped negotiate bills mostly as a kindness to patients in financial trouble, but it'd make sense to do it as a business too.

Hospital bills can often be negotiated to 50% of the original or less. A 35% cut of the savings could easily be 15% or more of the original bill.

One value of your super-high deductible insurance program is that they are still in the middle of the billing. It's possible you're already getting the insurance-negotiated rates for services instead of the chump-off-the-street inflated rates.
posted by Nelson at 7:26 AM on August 26, 2013