How to Deal With Medical Bills

Medical bills from a final illness can be overwhelming, but understanding your rights and options can significantly reduce the financial burden. First and most importantly: medical debt is an obligation of the estate, not of family members personally, unless you signed a financial guarantee form at the hospital. Do not pay medical bills from your personal funds — the estate should pay them.

Request an itemized bill from every medical provider, not just a summary statement. Studies have found that a significant majority of hospital bills contain errors — duplicate charges, charges for services not rendered, incorrect coding, and inflated prices. Compare the itemized bill against insurance explanation of benefits (EOB) statements to verify that insurance paid its share correctly. If you find errors, call the provider's billing department and dispute them.

If the bills are accurate but unaffordable for the estate, negotiate. Hospitals and large medical practices often have financial assistance programs (sometimes called "charity care") that can reduce or forgive bills for patients or estates that meet income criteria. Even without a formal program, most providers will accept a settlement for less than the full amount — 40 to 60 cents on the dollar is a common settlement range for hospital bills. Call the billing department and say: "The estate has limited resources. Can we discuss a reduced settlement?" Get any agreement in writing before making payment. Medical bills are among the lowest-priority debts in estate settlement, so if the estate is insolvent, medical providers may receive little or nothing after higher-priority debts (funeral costs, taxes, secured debts) are paid.