Here's how to negotiate medical debt, reduce payments and tackle unpaid hospital bills.
Talk about trauma. The last thing most people need after a frightening or painful medical procedure is an equally terrifying hospital bill.
“The impact of unexpected, high medical bills can be really devastating and stressful to individuals and families,” says Maureen Lamb, CEO and founder of Medical Bill Support, which works with health care consumers to reduce medical costs. This stress has been increased by the confusion associated with billing for coronavirus tests, she says.
About one-quarter of U.S. adults say they or a member of their household have had problems paying medical bills during the past year, according to polling results from the Kaiser Family Foundation published in June 2019. About half of that group said medical bills had a major impact on their families. With people sick and out of work during the coronavirus pandemic, concerns about medical costs are likely remaining high in 2020.
But don't despair. Health care consumers have a range of options when it comes to tackling medical debt. Here's what to know if you can't repay your medical bills:
- Understand what happens when bills go unpaid.
- Check your medical bills for errors.
- Negotiate medical bills.
- Get help paying the medical bills.
- Consider filing bankruptcy for medical bills.
- Understand medical debt relief during the coronavirus pandemic.
Understand What Happens When Bills Go Unpaid
After a period of nonpayment, the hospital or health care facility will likely sell unpaid health care bills to a collections agency, which works to recoup its investment in your debt. The amount of time before a debt goes to collections can vary depending on the health care provider, location or service received. But once the debt is in collections, it can continue to haunt you as collections agents call, write and text to request repayment. Having a bill in collections also dings your credit score, with collections listings remaining on your FICO credit report for up to seven years.
You can't make medical debt and hospital bills disappear by ignoring them, experts say. “The biggest risk of ignoring debt is that the creditor or collector will file a lawsuit against you,” says Amy Loftsgordon, foreclosure, collections and debt management editor at Nolo, a publisher of do-it-yourself legal books and software, via email. “If you then also ignore the suit, a court will most likely award the creditor a default judgment, which is an automatic win.”
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While having a medical bill in collections is never a good idea, remember your rights when dealing with debt collectors. They can't harass you, lie to you, threaten to arrest or deport you or call you in the middle of the night. You can take the time to confirm the debt is yours and try to negotiate with collection agencies to get on an affordable repayment plan or even reduce the amount owed.
Check Your Medical Bills for Errors
Confirm whether the hospital bill you received is correct. You have a right to ask for an itemized statement and audit it for unnecessary charges, such as double-billing and unexpected hospital fees. To avoid having your debt sent to collections, request that the health care facility put your account on hold for 30 days while you review your bill and make necessary calls. For example, if you're in talks with your insurer, Lamb suggests explaining, “I'm waiting for my insurance company. I have an appeal because of a bill that wasn't paid, and can you please work with me? I don't want to see the bill go to collections.”
If you think your insurance company didn't cover what it was supposed to cover, get them on the phone. Compare your itemized bill against the explanation of benefits statement and make sure that everything was covered as it should have been. A representative from the insurance company may need to walk you through some of the jargon, Lamb says. “Sometimes the representatives will be able to explain what was paid according to their code,” she says.
If you still have questions, compare your bill against your medical records to ensure that the services you received match what's on the chart. You'll likely pay some kind of fee for medical record forms, which varies by state.
Bring any errors or discrepancies to the attention of your health care provider or insurer to get them removed and have your medical bill reduced. Medical billing errors are surprisingly common. Mistakes can include double-billing, when a patient is charged more than once for the same item, procedure or service, and charges for items, such as routine supplies, that shouldn't be on the bill. Hiring a patient advocate can also help you through this process if you're finding it tough to navigate solo. For a medical billing advocate, expect to pay an hourly rate or sacrifice a percentage of savings.
Negotiate Medical Bills
Call the hospital billing office or debt collector. Speak with the hospital billing office – or negotiate with the debt collector if you're in collections – to review your options and make payments affordable. Explain the situation and try asking for a break. Consider asking for a zero-interest payment plan, Lamb says. “I always recommend working out something with the billing office in terms of some sort of payment plan,” Lamb says. You may also be able to secure a discount if you offer to pay what you can in cash.
Ask whether you can pay the insurance rate. If your procedure wasn't covered for any reason by insurance, ask the health care provider if you can pay the insurance rate, which can be lower than what the health care facility charges individual payees.
Take good notes. When talking to any billing or debt collection representatives over the phone, note the date, time, representative's name and any call reference number. Make sure to be polite and treat customer service representatives with respect, Lamb says. They're more likely to work with you if you're not shouting furiously at them.
Work with a patient advocate. If you sign an authorization form, a patient advocate like Lamb can make phone calls to insurers and billing offices on your behalf, parsing through the jargon and clearing other hurdles.
Get Help Paying the Medical Bills
Federal law requires nonprofit hospitals to provide financial assistance to qualified low-income patients who can't repay their medical bills, so check whether the hospital treating you is a nonprofit. Applicants will need to show proof that their income is low enough to qualify, such as pay stubs, tax returns and other financial documents. “If they qualify, (patients) will have a bill that is reduced or completely written off,” Lamb says. That means you may even get out of paying your medical bills.
Even if the hospital operates as a for-profit institution, it might choose to offer one of these programs voluntarily or be required to provide financial assistance by state law, so it's worth checking, says April Kuehnhoff, staff attorney at the National Consumer Law Center in Boston.
It's also worth applying for financial assistance, even if you suspect that you might not be approved, experts say. These plans often work on a sliding scale, so you may still get 20% off your medical bill or more.
Consider Filing Bankruptcy for Medical Bills
Medical debt may be discharged in bankruptcy, but experts caution that a medical bankruptcy shouldn't be taken lightly since it will crater your credit health and make it tough to qualify for consumer debt in the future. Bankruptcies will stay on your FICO credit report for up to a decade. Says Loftsgordon: “If you need help weighing the pros and cons of trying to settle your debts versus filing for bankruptcy, it's a good idea to talk with a bankruptcy attorney.”
Understand Medical Debt Relief During the Coronavirus Pandemic
To deal with the financial and medical emergency created by the COVID-19 pandemic, the federal government and some states have passed measures to shore up health insurance and protect residents from aggressive debt collection measures.
One example is Colorado, where state politicians have suspended the initiation of “extraordinary” collections actions, such as wage garnishment or account seizures, Loftsgordon says. To receive this COVID-19-related relief, you'll need to let the creditor know that you're experiencing a hardship related to the coronavirus pandemic.
Additionally, federal law requires comprehensive health insurance plans to waive the cost-sharing component of certain COVID-19-related services such as testing. Some states are requiring health insurers to expand coverage even further, says Jenifer Bosco, staff attorney at the National Consumer Law Center. For information on individual state actions, visit this map from The Commonwealth Fund.
If you qualify for Medicaid, which provides health insurance for low-income folks, check your state's rules for accessing retroactive eligibility, which can extend Medicaid coverage to the previous 90 days. Some states such as Massachusetts have made this more accessible during the COVID-19 pandemic, Bosco says. That may help you gain coverage for a medical bill acquired during the previous three months.
To check whether your state is offering COVID-related medical bill relief, do an online search for your state's consumer health advocate, Bosco recommends. You may also see if your state's insurance division or attorney general have posted information on your options.