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Can I Negotiate Medical Debts on My Credit Report?

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A reader, Cindy, told us her credit report lists a $2,500 bill for some emergency room visits. While she can afford to pay, she would prefer to negotiate to get the bill lower. She thinks the charges were too high.

They were all ER visits where they overcharged as usual. $400 to see the triage nurse to get my temp, blood pressure & ask some questions.

First, from what we see, $2,500 for multiple emergency room visits is not surprising; in fact we’ve seen much larger bills for just one visit! However, that doesn’t mean it’s accurate and that Cindy could not benefit from going over it to check for errors such as duplicate charges. If there are overcharges, she may be able to get her bill reduced without negotiating.

Still, it’s easy to understand her frustration. Anyone who has ever seen a bill for, say, $1,500, next to the words “negotiated rate — $350” knows that the big insurers seldom pay sticker price for medical procedures. So being asked to pay full freight can feel unfair.

From Cindy’s note it was unclear when she incurred those medical charges. It might be worth talking with the hospital about the charges and paying at least enough to keep the debt out of collections. Although Cindy does not think she should have to pay the full amount, the “price” of a lower credit score score could prove to be a lot higher, since a lower score (the potential consequence of not paying or paying late) could result in Cindy having to pay higher interest on credit cards, a mortgage or car loans.

A good credit score is worth preserving. (There’s also a myth that medical debt doesn’t count in credit scores; don’t believe it.) Also, the higher your credit score, the greater the impact one negative event has. If the account went to collections, it would be a big black mark on Cindy’s credit, likely causing a serious drop in her credit scores.  Even if she paid it off at some point, the collections account would remain on her credit reports for seven years from the delinquency date.

Given that she has the funds to do so, it might be smart to pay first and ask questions later to keep the account out of collections. If she does this, it may be less likely she will get the discount she is hoping for, but the hospital would have to refund any overpayment resulting from a billing error. However, there’s no guarantee she would be able to negotiate a discount if she waits to pay. But if the account goes to collections, she can count on some serious damage to her credit scores.

So although you have nothing to lose by asking for a discount, the same cannot be said of delaying payment. In the long run, you may pay a hefty price for refusing to pay a bill you think is unfair. And you’ll likely have to pay it anyway.

If you’re concerned about how an outstanding medical debt could be affecting your credit, then that can be a good motivation for getting up to speed on your credit reports and credit scores.  You can pull your credit reports for free once a year, and there are free tools that allow you to see your credit scores, like the Credit Report Card, which gives you two of your credit scores and a breakdown of what’s affecting your credit every month.

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