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Medical Bill Nightmares

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Medical Bill Nightmares

It could happen to anyone at anytime. A trip to the emergency room or bad news from your doctor could result in thousands of dollars in medical bills. Even with medical insurance, you may end up with catastrophic debt as a result of your illness. To make matters worse, many health care providers have unfair billing practices that only add to the financial issues faced by patients. Except for a few billionaires, every American is just one major illness away from bankruptcy. In this article we outline this issue and show you what you can do to avoid medical bill nightmares.

The Facts

Medical debt issues impact us all, whether you have insurance or not. Here are some startling statistics:

Uninsured patients – Over 45 million Americans (15% of the population) don’t have health insurance. Nearly half of people without medical insurance currently have outstanding medical debts, averaging $9,000 per person.

Insured patients – Over 60% of families who report having medical debt problems are covered by medical insurance. In fact, 75% of people who filed for bankruptcy because of medical debts had health insurance.

The Issues

A recent report from the National Consumer Law Center highlighted the growing problem of abusive medical debt collection practices. According to their report, hospitals use the following tactics:

Not offering charity care – Hospital are often officially registered as non-profits on the basis that they provide free or discounted health services to qualified patients. However, it has been shown that more than 70% of patients with medical debts are never offered financial assistance from their providers. In fact, uninsured and poor patients are routinely charged much higher prices for their treatment than others.

Suing patients and their spouses – Health care providers can send medical debts to collections, file judgments, garnish wages, obtain home liens, and even take patients to court over medical bills that they cannot afford to pay. In many cases, the spouses of patients are pursued for payment even if they don’t live in a common law state.

Offering expensive credit to patients – If you have medical bills you are unable to pay, health care providers may offer you expensive credit cards or loans as a solution. For example, Kaiser offers a credit card with a 9.9% introductory rate that quickly increases to 24.24%. Some of these accounts are so expensive that your debt will actually increase as you pay each month.

Using collections and credit to coerce patients – Debt issues can lead to serious credit score damage. When health care providers sell debts to collections, file judgments, and obtain liens, they are damaging the patient’s credit profile. According to the Federal Reserve, over 50% of collection records and 20% of lawsuits that appear on credit reports are related to medical debts.

Denying future care to debtors – Some health care providers have strict policies in place that deny healthcare to patients who owe money for previous treatments. In rural areas, there may be few health care alternatives available for people who are ill and unable to pay their debts.

Altogether, these abusive debt practices can lead consumers with health problems to destroy their credit, lose their homes, or file for bankruptcy. Without an understanding of their rights, a secure financial standing, and a willingness to negotiate, many patients are stuck facing a financial crisis at the same time as a health crisis.

The Options

If you find yourself unable to repay medical bills or in the hospital without insurance, there are a few things you can do to avoid being stuck with an unmanageable amount of debt:

Know your options – Evaluate all the insurance, Medicaid, and charity options available to you. The time it takes to investigate possible alternatives to high medical bills is well worth it. Don’t be afraid to ask the medical billing office questions about your options. Keep asking if there is something you don’t understand about your insurance or financing choices.

Review your bills closely – It’s is very common to find double billings and errors on health care invoices. Take the time to closely review each of your bills and challenge any costs that you feel are incorrect. When you are challenging bills, however, be sure that the medical office is not selling your debts to collections while they are in dispute.

Pay with credit card – Use your own low APR credit card to pay for medical bills instead of opening a new account through the hospital. If possible, choose a credit card with a long 0% introductory rate and a low APR after that period expires.

Avoid financial traps – Pay your most important bills (such as your mortgage) first, before you pay medical bills. Never use a home equity loan to pay expensive medical bills. This type of loan can put your home at risk if you are unable to pay.

The Solutions

Increased attention has recently been paid to the issue of unfair medical billing practices. With recent reports by The Access Fund, Harvard University, and the NCLC, the dramatic issues that patients face are coming to light. The following regulations are recommended in order to improve patient’s rights and control abusive medical billings:

Regulate charity care programs – Health care providers should have clear standards to follow in regards to providing free or reduced care to patients. Patients should be given a full disclosure of their financing and assistance options.

Set clear income discount policies – Sliding scale billing should be instituted to ensure that the poorest patients aren’t paying the most for their health care. The same discounts that insurance companies receive on medical bills should be applied to consumers.

Establish reasonable payment programs – Medical offices could actually increase their billing returns by establishing longer repayment periods with monthly minimums tied to the patient’s income. Just as student loans are set with low interest rates and low monthly payments, medical debt repayment should be affordable.

Restrict the sale of debts to collections – Medical debts should not be sold to collection agencies until payment negotiations have been completed and a set amount of time has passed. Also, the use of wage garnishment, property liens, and judgments for medical bill collection should be restricted.

Cap medical prices for low income patients – Healthcare providers should not collect more than the actual costs of services from patients who are low-income or uninsured. Currently, these patients often pay inflated “sticker prices” for their medical care.

Protect spouses from medical debts – Restrict health care providers from using common law doctrines to collect medical debts from spouses of patients, especially when these spouses are elderly or low-income.

Some of these reforms are already in place in certain areas. For example, California, Massachusetts and Texas require healthcare providers to account for their charity care spending. Connecticut currently has laws in place that prohibit charity care hospitals from suing a patient for debts until it is determined that the debtor is not eligible for free or reduced costs services.

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  • michael podobnikar

    I’m a retired physician. When a patient has a large hospital bill or Dr. bill, I suggest that they ask what the most popular HMO pays them for the same services, and ask for the same discounted fee. I think that making the uninsured make up for losses that they take from HMOs by charging the uninsured full price. is nasty. No Dr. will go hungry; but many patients will.

    • Credit Experts

      Great idea — thanks for suggesting that.

    • gar

      This should actually be the rule that a hospital is required to follow.
      But instead they bill a retail price that no insurance company on the planet would even consider paying.
      There’s some nasty people working in the financial departments of hospitals these days. And they run rough shod over people with no restraints put on their behavior.

  • guest

    Just got my husbands hospital bill today $215,000 – for 6 day stay in hospital – they reduced this to 35,000 – That is one year salary for me before taxes.. I guess I should of quit my job when he got sick – but knowing my luck we still would not qualify for any help – Just one RX – is 300.00 for 30 pills — now he is only on 15 different Medications . This all adds up.. If I get 2 job- I have to pay more for the Obanma Care insurance– have to tell my boss not to give my raise – I can not pay these bills – my credit is already ruined .. one more mark against it will not hurt it one bit..

    • anis

      Wishing healthy and happy life for you and your husband but I am extremely surprised that up to such extent people are mislead! With 35,000 yearly income you may have to pay very little or zero amount with tax credits towards Obama Care. Please explore what you are entitled to?

    • ChristineP

      Actually under Obama care your max out of pocket should only be around
      $6,600 individually or $13,200 per family annually. If you’re being billed for $35,000 they’re wrong.

  • jem5

    I have a doctor billing me two years after the fact for services that were paid at the time of the visit by co-pay through a collection agency? and some other amount that they cannot advise what it is. When calling they say it is for a visit and I say we paid a co-pay per insurance. Are you attempting to bill me over and above what you contract says? they say they will call back. In the meantime the collection agency says they will start court proceedings. I pay it and ask for a receipt. The doctor refused to give me a receipt and sends me a receipt showing some other amount that was paid by the insurance company. I have been trying for 5 years to get copies of accounting statements on my and my husbands accounts to no avail and only to be ignored. Because no receipt was given my flex spending is billing me back. I called them again only to be ignored and so have reported them to Attorney General and BBB. I think they billed me over and above contracted amounts. I have spent over 500 hours on this. Anyone know an attorney that can work on the plan of getting paid if they get anything out of this practice for me?

    • Gerri Detweiler

      I agree that it is time for you to talk with a consumer law attorney. The debt collection agency may be breaking the law and you may have a case for credit damage. Visit the website of the National Association of Consumer Advocates if you need help finding one in your area.

  • BillA

    I had a short stay in the hospital a few years back. The problem with billing is not the health care providers themselves – it is the third party billing companies they contract with. My insurer shot down about $6000 of charges as not pertaining to why I was in the hospital in the first place. About 6 months later I start getting bills from providers via these billing companies. The bills were for the same charges that the insurance company said were not valid. I called the medical providers offices – all three were not even aware that there was billing issues.

    The worst of the bills was a $750 charge from the ER department. The hospital admissions and ER are the same area. When you arrive they ask for some information and take BP and temp. You then wait until you are taken to your room. The bill that the insurer got was for the highest level of ER service – the same if I had come in with a gun shot wound and was near death. I came in for a planned procedure and could have taken a five mile hike when I arrived. The insurance company denied the bill as ER services would not be indicated on a normal admission. After three months of disputes the bill went away. My solution – make the provider equally liable for any billing that their contractors juice up and send out.

  • jimbino

    I’ve found that the best way to deal with Amerikan medical system is to get my medical care overseas, where it is far cheaper. Places like Cuba, Argentina, Brazil, Costa Rica, India, Thailand, Hungary and Czech Republic.

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