The Ultimate Step-By-Step Guide To Lowering Your Medical Debt


By Michael Wong, M.D.

Medical bills suck.

Whether it was an unplanned trip to the emergency room, or even a scheduled doctor's visit, the shock of a massive medical bill is an ugly reality that millions of Americans face. Unfortunately it only seems to be getting worse.

If you’ve ever gotten this “bill shock’ you’re not alone. 1 in 3 americans are struggling or know someone struggling with medical debt. It has gotten so bad that medical debt is the number 1 reason people consider taking money out of their retirement or filing bankruptcy. In fact, up to 60% of bankruptcies are because of medical debt!

Instead of using their savings and retirement for, uh, retirement, many are instead worried about possible medical bills that may come their way. 33% of Americans delay care because they worry about their bill. Can you blame them? If you are uninsured, that trip to the emergency room could cost you thousands of dollars. Even with insurance, many are on the hook for an absurd amount of  money. This leads to a vicious cycle of stress. It’s not surprising, then, that 45% of survey respondents say they feel worried or stressed when thinking about health care costs.

It is hard to stare down the face of a massive bill, without knowing how to pay it. The last thing you want to worry about when recovering, is having to worry about things like:

  • What happens if I can’t pay?
  • What will happen to my credit score?
  • Will I have to file for bankruptcy?

So what do you do? What are your options?

Well, if you have a large medical bill, don’t pay it - I mean, at least not right away. That’s because most medical bills can be negotiated! That’s right. If you know the steps, you could lower 30%, or 50%, or even 80% off your medical bill. Sound too good to be true? Well, it’s not - Walnut has gotten these results. Negotiating medical bills iis something not many Americans know of, and it’s costing them some serious cash. So in this definitive guide, we are going to go over step-by-step the best way to reduce your medical bill.

Step 1: Look For Hospital Financial Assistance

When you receive your bill, try to move away from the eye-boggling numbers, and look for another number.

That’s the number for the financial assistance office. 

Many places have a team dedicated to financial assistance who will work with you and your bill. So take a look around your bill for this number, as many bills contain it! 

But what if my bill doesn’t have a number? Well, there are other ways to find out if your hospital offers financial assistance.

Pro tip: Look online either through Google or through your hospital/institution’s website for a financial assistance number. If there isn’t a number listed on the bill or online, call the front desk or operator and see if they can direct you to one.
Pro tip: Find the physical office. If you have the number but they’re not answering, or if there isn’t a number at all, there may instead be a physical office location. It’s much harder to ignore you in person. See if there is a physical location or go to your hospital’s front desk/information desk and ask!

Step 2: Ask For An Itemized Bill

Don’t settle for a vague medical bill with a massive total but no insight to how they came up with that number. Instead, ask for an itemized bill. An itemized bill includes specific details on the services you were provided, including dates and charges for each item of service. Most hospitals are required to provide an itemized bill if you request it. Some useful nuggets of information an itemized bill can provide include:

  • Date of service
  • Service provided
  • Billing code
  • Cost

The more transparency the better!

Step 3: Understand Your Itemized Bill

Great, so you’ve gotten your itemized bill - but what the heck does it all mean? You start to see things like CPT codes and ICD and strings of numbers. How do you make sense of all this?

Well, let’s break it down:

I. Current Procedural Terminology

Current Procedural Terminology (CPT) codes are codes doctors use to describe what services were provided. This is how providers get paid. These codes are often 5 digits long but may contain letters.

Some examples of CPT codes include:

  • 71046: Chest X-ray
  • 36415: Blood draw for lab testing
  • 27447: Knee replacement

Unfortunately, it can be tricky getting access to the CPT codes and finding out what they mean. However, where there’s a will there's a way.

Pro tip: Look up CPT codes online to make sure they match your visit. Try sites like:, (Codify) (Find-A-Code), or just Google your code directly.

II. Healthcare Common Procedure Coding System

Healthcare Common Procedure Coding System (HCPCS) is the coding system used by Medicare. This is very similar to CPT codes and again are ways to describe services given. They are separated into Level I HCPCS codes and Level II. Don’t worry, I’ll simplify.

Level I: Same as the CPT Codes

Level II: Identify products, supplies and services not included in the CPT codes. This includes things like prosthetics, orthotics, supplies. These are often equipment outside of your doctor’s office.

I won’t go into Level I codes, but some examples of Level II HCPCS codes are:

  • E0100: Walking cane
  • E1354: Cart for an oxygen tank
  • E0950: Wheelchair tray
Pro tip: You guessed it, look it up online to make sure the code they used matches what was given/done. Example -


III. International Classification of Diseases

International Classification of Diseases, or ICD codes are codes that help identify your diagnosis. What is your illness? What did you come to the office or emergency room for? These codes are matched up with the CPT codes to make sure your diagnosis and services matched. 

For example, you may have walked into an emergency room with a fever, cough, and shortness of breath. They may diagnose you with pneumonia (ICD code J16.8) and order a chest x-ray (CPT code 71046). Great, this matches - diagnosis and services rendered.   

Some examples of ICD-10 codes are:

  • E11.9 Type 2 diabetes without complications
  • N39.0 Urinary tract infection
  • E03.9 Hypothyroidism
Pro tip: You know the drill! Look up the ICD10 codes to make sure you weren’t diagnosed with something you didn’t have! This is the best resource I have found (

Step 4: Check Your Itemized Bill For Errors

Here’s a mind blowing fact - Up to 80% of medical bills contain an error! If you take your bill at face-value, you could be paying an incorrect bill! Just a little investigating can yield massive savings. Let’s go over some common billing errors:

Learn to look for common billing errors including:

  • Double billing: Simple, but oh so common. Make sure your bill isn’t for something you’ve already paid, or that services are listed twice.
  • Services not rendered: This is a false charge for a service that wasn’t delivered. Sometimes this is in error, but unfortunately some providers may do this to inflate their bills. Make sure you receive all the services, medications, lab work, imaging etc that you’re being charged for. If you notice an error, you can ask your hospital or insurance company for an audit.
  • Wrong Code: There are so many CPT codes, and it is very easy to make typos or input the incorrect CPT or ICD code. Again, make sure you aren’t accidentally billed for a service that wasn’t provided or doesn’t match your diagnosis!  If the codes don't match, your insurance (if you have it) may decline coverage. They’ll wonder why you got (mistakenly) got an elbow x-ray for your pneumonia when in reality it was a chest x-ray! 
  • Upcoding: This is when a provider may misrepresent their work by entering a service you didn’t receive, or use a code for a more intensive code than the actual service given. This is done in an attempt to receive more money.
  • Unbundling: There are certain services that fall under one umbrella code. However, sometimes these codes are broken up, or unbundled, leading to additional cost. For example, if you undergo a stress test (CPT code 93015) you often are monitored with an electrocardiogram (ECG) as well. Therefore, charging for this stress test, AND charging for an electrocardiogram (CPT 93000) would be unbundling and add to your cost.

Step 5: Look Up Fair Pricing

Just like how knowing the fair price for a used car helps guide your purchase, you want to know a fair price for your medical services. Unfortunately, for many, these prices are shrouded in secrecy. This makes it more difficult to know how much to pay and whether or not you’re being overcharged. Well, no longer!

Use a website like Healthcare Blue Book ( to understand what a service cost around your area. 

Write down your codes and services from your itemized bill as well as the charges. Now compare it to the fair prices listed online. Better yet, write down the total difference between the fair price and your price. You’ll be surprised what you find. One user got a bill for a $3000 MRI, when the fair price is less than $800!

Step 6: Prepare All Your Documents

You’ve done the legwork, now it’s time to get organized. Let’s recap what we have so far:

  • Itemized Bill
  • List of identified billing errors
  • List of your codes and charges
  • List of fair value prices and total difference compared to your charges
Pro tip: Know what common documents are required for financial assistance. For most hospitals, financial assistance is based on income level. This means you should have some proof of income such as tax returns or payslips. Some financial assistance offices require an additional paper or electronic form. Look online at your particular institution’s website and make sure this is all ready to go.

Step 7: Give Them A Call

This is it! You’ve done your homework, now let’s lower that medical bill. I know, it can seem daunting, but remember these are staff members dedicated to helping you. It’s their job. Here’s what to expect:

  • First, let them know why you’re calling - you have a large bill that you’re having difficulty paying. 
  • They’ll likely ask for verifying information.
  • Let them know of any billing errors or fair price discrepancies in your bill.
  • Ask for financial assistance, let them know your current income and if it qualifies for a bill reduction.
  • Be honest in your situation. If you’ve lost your job or are having other financial hardships, let them know.
  • Ask for a payment plan - many offer payment plans at 0% interest.
  • Ask for an upfront cash discount - most hospitals prefer a lump sum rather than a payment plan or going to a collection agency. Use this to your advantage. Ask if they’ll take x% off your debt if you pay them upfront right now. 

And lastly, perseverance pays off. If they don’t offer assistance initially, or if it isn’t enough, you can try again later. Remember, hospitals don’t want to go to collection agencies anymore than you do. 

Whew! You did it, you champion! Pat yourself on the back. Hopefully this guide has helped you save some hard-earned scratch. Now, back to using that retirement savings for, uh, retirement.

Disclosure: Michael Wong, M.D. is a cofounder of Walnut. Walnut ( can help. We negotiate down bills and offer 0% interest payment plans. What do you have to lose (other than your medical debt)?


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