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Protect Yourself from Medical Debt Overload with Self-Advocacy

December 27, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt

You or someone you know may be closing out the year with large amounts of medical debt even after insurance payments or what you thought were relatively minor surgeries or other procedures. In fact, you may feel like you’ve been hit by a blizzard by the sheer number of bills related to that one procedure. And they keep on coming.

One step you can do is confirm or validate the bill, especially if a lot of time has elapsed since the initial service. This simply means you want proof that you had the services rendered and do in fact owe the balance due. Under the Fair Credit Reporting Act, credit agencies are supposed to help consumers to ensure that bills are correct and fair before payment is rendered. But without good knowledge of these laws and taking the time necessary to investigate, you could end up paying much more than you owe. Here are a few other ways to stand up for yourself and your bottom line.

Keep Proof of Charges

The bad apples that pollute our debt collection environment may be operating on an entirely fraudulent basis. There have been many news stories of consumers receiving calls from phone bank operators, posing fraudulently as legitimate debt collectors. A tip off is that in many instances, the caller will fail to fully identify him/herself, their company, and the nature of the call. There are also reports that unprincipled companies are using ‘bread crumbs’ of financial data in order to manufacture phony debts that their workers demand payment for during outbound telephone calls. Collectors have been known to threaten litigation or other legal action without any legal basis as well as fail to provide written proof that a debt is owed when requested by the consumer.

One big part of your arsenal is the paper trail of charges, as well as Explanation of Benefits (or EOBs) that show whether or not the insurance company paid their fair share. Keep all of these documents on hand so that you can prove any overcharges and trigger an analysis by a credit agency.

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Small Debt Medical Bills Can Add Up to Large Debt

August 13, 2012 in Medical Debt

Here’s another tip about a specific debt situation that often affects those who have a false sense of security from owing just a little bit of money to a medical office or other business:

Pay attention to the less significant debt letters and small bill statements you receive. The major problem with ignoring these is that even the smallest debts, debts that may total only a couple of hundred dollars, can balloon into massive amounts of money when you don’t understand the collections process, the accrual of interest, or other factors.

So, how does your small dollar medical bill become a giant drag on your finances? It usually happens when the borrower simply decides not to pay anything and lets the bill lapse into collections. When third party collectors receive this account, they may be able to add certain types of charges. This may include additional fees for filing the debt in a legal office, as well as other fees related to documentation of the existing debt. Any costs that involve trying to shoe-horn the borrower into a local court can also show up on that person’s credit. Then there is the issue of ‘communications costs’ related to overdue bill notices, phone calls and more. While there are federal collection laws, each state also follows its own set of laws.

Avoiding critical communications with the original creditor, the doctor’s office, can get you into a lot of financial trouble. Remember this when small dollar claims for co-pays, deductibles and other expenses come in the mail, and you could be helping yourself out of many hundreds of dollars of additional debt. When it comes to handling various types of debt, and medical bills in particular, staying out of the loop and waiting until the last minute is almost always a poor choice.

(Update yourself on Senate Bill 2149 – Medical Debt Responsibility Act 2012: A bill currently in review to exclude medical debt from consumer reports that has been in collection and has been fully paid or settled.)

Past Due Medical Bills: When Do I Have to Pay?

May 5, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Debt, Medicare

Have you received a medical or hospital bill with no clear due date? This can be because of how bills are laid out or because of design issues. Typically, a bill or patient statement will show medical debt as 30, 60, or 90 days past due, providing the kind of urgency that can make you drop a check in the mail. Bills may also be labeled “second notice” or “third notice” to show that the biller has already tried to contact you. But, all of that doesn’t always tell you what you need to know: how long you have to pay before the bill goes to collections. There are several reasons you may choose not to pay your medical debt right away including having a lot of bills or long-term debts to juggle. Prioritizing which ones to pay can take precedent to stay afloat. And, some billing statements require real, actionable steps while medical bills seem to be written in some strange, esoteric language.

Medical Debt Collection: Common Practices

Every medical provider has their own system for handling past due bills. Some are quicker than others to send a past due bill to collections. Many have different billing systems that represent debt in different ways. Some may be explicit about a due date, others will not. In some cases, when patients call, the medical office admits that they don’t even know the exact date when a bill will go to collections. That’s what motivates many experienced consumer advocates and others to recommend “playing it safe” and promptly paying all past due medical bills aged longer than 30 days, which is a common grace period for payments.

Some patients, though, will make active attempts to talk to providers. Those who pick up the phone can often get on payment plans that will make due dates and everything else much clearer, while allowing for deferred payment according to the patient’s finances. Some can even qualify for charity. In many cases, it’s this direct communication which can yield benefits for both parties: you know where you stand and your provider receives data on how and when you are likely to pay a particular bill. It’s a win-win, and that’s why when it comes to vague patient statements, the direct approach is often best. How do you promote open communication with your provider on past due medical bills?

When is a Medical Bill Sent to a Collection Agency?

March 5, 2012 in health care costs, Health Insurance, Hospital Bills, Insurance Bills, Medical Care, Medical Debt

A recent article in the Chicago Tribune’s March 4, 2012, issue “Small, Paid-off Medical Debt Can Mar Credit, Upend Financing for Unknowing Americans” highlighted how quickly a pristine credit can plummet when unexpected medical bill balances show up on credit reports including previously paid off medical debt. According to the Commonwealth Fund, 30 million Americans were contacted by collection agencies in 2010, an increase of over 25 percent from 2005. And, the Access Project, a research group funded by health care foundations and advocates of tougher laws on medical debt collectors, estimate that over 3 million Americans who have paid off their debt in full still have their balances appearing on their credit reports. Most of the collection actions are attributed to medical bills with the majority of outstanding balances under $250.00.

Medical bills are sent to collection agencies quicker than you think. In fact, it is common to receive a bill within a few days or so of your procedure or hospital stay and the clock starts ticking. So, what can you do to minimize your account from being turned over to a collection agency?