Using AI to Negotiate a $195k Hospital Bill Down to $33k

OP agrees: "Ultimately, my big takeaway is that individuals on self-pay shouldn’t pay any more than an insurance company would pay—and which a hospital would accept as profitable business—than the largest medical payer in the country. I had access to tools that helped me land on that number, but the moral issue is clear. Nobody should pay more out of pocket than Medicare would pay. No one. ... Hospitals know they are the criminals they are and if you properly call them on it they will back down."

> I've heard a ton of cases where folks basically "pay what they can" for the bill and that's good enough for both parties. I doubt the reasoning Claude provided was ultimately what got the hospital to knock the bill down, probably more around the legal action and PR threats. Ironically, the hospital will probably count this as charity even though OP didn't want to be considered charity, as they had to write off part of the bill.

I read that OP refused to sign something that fraudulently said the full price was $195k but rather insisted on signing on a bill that said the full price was $33k or $37k or something. (Maybe $4k was called charity.) They might have presented a completely different bill to the IRS to justify tax-exempt status, but that illegal action would be totally on them; OP is not participating in their tax fraud. I applaud OP for that and hope this becomes the norm.

I'm sure they also have a long arsenal of various legal tricks they bundle into offerings like they did in the linked thread with respect to attempting to relabel it a charitable donation, etc.

They can't really claim their records are any kind of proof if apparently they now agree that 82% of it was wrong?

I think a public option is the only feasible path forward.

Not once have I had a sleepless night since been diagnosed over a decade ago about insurance, co-pay or how to afford my drugs/medical treatment.

I’m on two prescriptions per month, total cost to me is £114 a year (about 150 bucks).

Folks over in the US are getting hosed, twice the per capita with a worse outcome and it costs you a fortune on top personally.

That healthcare is tied to employment is just the insane cherry on top (I’m aware of the historical reasons why that happened but should have been fixed not long after).

I notice regular doctors and dentists do this too. They’ll bill my insurance for extras in case they’ll pay and when insurance says no, the doctor doesn’t bill me either.

Everyone is just trying to suck the most money out of everyone else. It sucks if you’re self-pay because you don’t have the weight of a whole company to do that due diligence for you.

The good news is this should be easy to reproduce to see how it does - just google around for an example medical bill with billing codes and feed it to Claude.

But you better believe that hospitals all over the place are also using AI to find ways around Medicare/Insurance rules to maximize their profit too.

The rules are probably going to get WAY more complex because they will rely less on a few humans, and more on very powerful AIs.

Tons of institutions that specialize in screwing people are built this way because it's pretty hard to "overtly" build an institution to screw people.

The discounts he negotiated left me with tons of cash & were in excess of the fee he charged me.

Im increasingly of the opinion that AI gives people more confidence than insight. The author probably could have just thought of the same or similar things to assert to the hospital and gotten the same result. However, he wouldn't have necessarily though his assertions would be convincing, since he has no idea whats going on. AI doesn't either, but it seems like it does.

What exactly do you think negotiating is? Real negotiation in business transactions is more often based on agreements around certain facts than emotional manipulation.

If the OPs brother-in-law had had insurance, the hospital would have billed the insurance company the same $195k (albeit with CPT codes in the first place).

The insurance company would have come back and said, "Ok, great, thanks for the bill. We've analyzed it, and you're authorized to received $37k (or whatever the number was) based off our contract/rules."

That number would typically be a bit higher for private insurance (Blue Cross, Blue Shield, United Healthcare, etc), a little lower for Medicare, and even lower for than that for Medicaid.

Then the insurance would have made their calculations relative to the brother-in-law's deductible/coinsurance/etc., made an electronic payment to the hospital, and said, "Ok, you can collect the $X,XXX balance from the patient." ($37k - the Insurers responsability = Patient Responsibility)

Likely by this point in a chronic and fatal disease, the patient would have hit their out-of-pocket maximum previously, so the $37k would have been covered at 100% by the insurance provider.

That's basically the way all medical billing to private and government insurance providers in this country works.

"Put in everything we did and see what we can get paid for by insurance" isn't criminal behavior, it's the way essentially every pay-for-service healthcare organization in the country bills for its services.

I don't say that to either defend the system, or to defend the actions of the hospital in this instance. It certainly feels criminal for the hospital to send an individual an inflated bill they would never expect to pay.

I'm a cofounder of Turquoise Health and this is all we do, all day. Our purpose is to make it really easy to know the entire, all-in, upfront cost of a complex healthcare encounter under any insurance plan. You can see upfront bills for many procedures paid by various healthcare plans on our website.

The information posted in the thread is generally correct. Hospitals have fictional list prices and they on average only expect to collect ~30% of that list price from commercial insurance plans. For Medicare patients, they collect around 15%. The amount the user finally settled for was ~15% of the billed amount, so it all checks out.

The reason for fictional list prices (like everything in US healthcare) is historical, but that doesn't make it any more logical. Many hospital insurance contracts are written as "insurer will pay X% of hospital's billed charges for Y treatment" where X% is a number like 30. No one is 'supposed' to pay anywhere near the list price. Yes, this is a terrible way to do things. Yes, there are shenanigans with logging expected price reductions are 'charity' for tax purposes. But there isn't a single bad guy here. The whole system that is a mess on all sides.

Part of the problem is that the US healthcare billing system is incredibly complex. Billing is as granular as possible. It's like paying for a burger at a restaurant by paying for separate line items like the sesame seeds on the bun, the flour in the bun, the employee time to set the bun on the burger, the level of experience of the bun-setter (was it a Dr. Bun Setter or an RN bun setter?), etc. But like the user said, some of these granular charges get rolled up into a fixed rate for the main service.

However, the roll-up rules are different for every insurance contract. So saying the hospital 'billed them twice' is only maybe true. The answer would be different based on the patient's specific insurance plan and how that insurance company negotiated it. Hospitals often have little idea how much they will get paid to do X service before it happens. They just bill the insurance company and see what comes back. When a patient comes in without insurance, they don't know how to estimate the bill since there is no insurance agreement to follow. So they start from the imaginary list prices and send the patient an astronomically high bill, expecting it to be negotiated down. In some areas, there are now laws like 'you can't charge an uninsured patient more than your highest negotiated insurance rate' but these are not universal.

If you find yourself in this situation, there are good charities like 'Dollar For' that can help patients negotiate this bill down for you. We are trying to address this complexity with software and have made a lot of progress, but there is much more to do. The government has legislation (the No Surprises Act) that requires hospitals to provide upfront estimates and enter mediation if the bill varies more than $400 from that amount. But some parts of the law don't have an enforcement date set yet, which we hope changes soon.

Which is a great description of the American health care industry, even before its involvement with AI in any capacity.

I just did this with a pet insurance bill, and ChatGPT was very helpful. They denied based on the pre-existing condition exclusion even where it was obviously not valid (my dog chipped her tooth severely enough to need a root canal, and they denied because years before when she wasn't covered under the policy, she had chipped the same tooth in a minor, completely cosmetic way).

I was sure they were in the wrong and would've written a demand letter even in the pre-AI days, but ChatGPT helped me articulate it in a way that made me sound vastly more competent than the average consumer threatening a lawsuit. It helped make my language as legally formal as possible, and it gave me specific statutes around what comprises a pre-existing condition in CA as well as case law that placed very high standards on insurers seeking to decline coverage by invoking an exclusion (yes I checked, and they were real cases that said what it thought they said).

Gave them fourteen days to reverse the denial before I filed in small claims court, and on day fourteen got a letter informing me that the claim would be paid in full. It's of basically no cost to them to deny even remotely borderline cases, so you have to make them believe that you will use the court system or whatever other escalation paths there are to impose costs, and LLMs are great for that.

This will always happen, especially if you don't have health insurance. I had to have surgery without insurance in the early 2000s, and I was able to knock off a large percentage of the bill (don't remember how much, it's been decades) by literally just writing back to the hospital and asking them to double check and verify the line items I was being charged.

(edit: more stories along similar lines in this thread: https://news.ycombinator.com/item?id=45735136)

Yes, because, there is an entire department _dedicated_ to this function. You just call them and say "I can't pay this" and you'll get the same result.

https://fighthealthinsurance.com/ was previously posted about a year ago, but I see no traction. There is no moat, just build and distribute, right?

Show HN: Make your health insurance company cry too Fight Health Insurance - https://news.ycombinator.com/item?id=41356832 - August 2024

(broadly speaking, my thesis is generative AI can be weaponized to break down bureaucracy designed to extract from the human, from cost efficiency and power asymmetry perspectives)

As a not-American, I wonder what are the rules of this "game". Can anyone in the US just ignore their bills and debt and it's all ignored anyway?

Because in most European countries, debt is a very serious thing. Even small debt like an unpaid 50 Euro bill can be sold to debt collectors who can seize your property or garnish your wage, pension or bank accounts to pay your debt plus the collection fee, so people here are incredibly weary of unpaid bills or taking debt for unnecessary things other than houses or cars.

https://www.nytimes.com/2025/07/17/business/medical-debt-cre...

Of course, I hadn't actually lived there since I was a teenager over a decade ago, and I'm sure they knew that, but the harassment tactic worked and I just paid it.

NPR Investigation: Many U.S. hospitals sue patients for debts or threaten their credit - https://www.npr.org/sections/health-shots/2022/12/21/1144491... - December 21st, 2022

Some Hospitals Kept Suing Patients Over Medical Debt Through the Pandemic - https://www.propublica.org/article/some-hospitals-kept-suing... - June 14th, 2021

But not hard to imagine United Health "investing" in OpenAI and Anthropic to "curate" the information they generate.