How to Handle Medical Debt

One minute you’re healthy and the next minute you’re burdened with medical bills. It happens more often than you may think, and it doesn’t take a debilitating illness to get to this point. In fact, if you head to the emergency room and they take a slew of labs or require an overnight stay to diagnose your issue, you could easily rack up thousands in medical bills. And if you’re uninsured, that only adds to the bill.

The good news is there are several ways to handle medical debt without emptying your bank account or pulling your hair out. Keep reading to learn more.

Review your bill in its entirety.

Before you give the medical provider a dime towards the bill, review it from top to bottom. Confirm that the line items accurately reflect the treatment you received and that there aren’t any inconsistencies if pricing. If you spot issues, notify the billing office right away to have them resolved.

Compare your bill to the explanation of benefits.

Assuming you’re insured, the next step is to compare your bill to the explanation of benefits sent out by your insurance company. (Didn’t have insurance coverage at the time of the visit? You can skip this step).

If you haven’t yet received this document, reach out and request that it be sent promptly. You may also be able to login to your insurance provider’s online portal and view an electronic copy there.

When comparing the two, you want to make sure that the insurance company took care of the portion of the expenses that they were supposed to, as outlined in your policy. It’s not unusual for billing and coding errors to happen, so you may find that the insurance company only covered 70 percent of a service when they were supposed to cover 80 percent. Or maybe they assessed the full amount for a particular procedure when it was supposed to be covered at 100 percent because it was coded incorrectly by the medical provider’s billing office.

Either way, it won’t take a ton of effort to reach out to both the insurance company and medical provider to have the bill updated so it can be processed correctly. And you’ll often find that by taking just a few minutes of your time, you can save hundreds if not thousands in medical costs.

Request a payment plan.

Medical providers are aware that most consumers don’t have thousands of dollars lying around waiting to be spent on healthcare expenses. For this reason, they offer payment plans designed to fit every budget.

Oftentimes, they are not accompanied by interest and allow you to make a monthly payment that is comfortable and doesn’t stretch finances to thin. Another added benefit of payment plans is the ability to protect your credit rating and avoid debt collectors as the medical provider will know you’re committed to doing your part to handle your outstanding debt.

But you have to be willing to call in and set up a payment plan to get the ball rolling. And when you do so, be sure to only commit to an amount you can afford to pay each month or you run the risk of the account being turned over to collections.

Negotiate a discounted settlement.

Have you tried calling the medical provider’s billing office to inquire about discounts or settlement options? You may be able to have your medical debt balance steeply reduced or off the strength of a financial hardship. This is also common if you were uninsured at the time services were rendered.

And in more extreme cases, you may qualify to have the debt written-off completely if you’re in dire financial straits. But you may have to provide financial documentation and meet with an in-house representative to review your situation and determine if this option is available to you.

Explore financial hardship programs.

Still no luck? You can also try exploring federal or nonprofit programs and organizations that may be able to assist. Most of these programs are income-based, and your local health department or hospital may have information on hand to point you in the right direction.

Also, visit and use their comprehensive search tool to find health and medical assistance programs that you may qualify for. Results can be filtered by state and subcategory.

Hire a medical bill advocate to negotiate on your behalf.

Prefer to let a third-party to the legwork for you? Consider hiring a medical bill advocate to negotiate the balances and work out the details with your medical providers. They will also analyze all of your bills to determine if there are issues with the coding, if you haven’t been assessed the proper rates for services, or if the insurance provider should cover a higher portion of the expenses.

This option is ideal if you’re medical expenses are steep as a result of a serious medical condition or long-term stay in the hospital.

If you’d like to explore this option, you can ask around for recommendations or contact the Medical Billing Advocates of America to learn more. But keep in mind that medical bill advocates typically charge a fee for their services.

Borrow the funds.

As a last resort, you can apply for a personal loan or use a credit card to pay back what you owe. You can also apply for a medical credit card, like CareCredit, to help alleviate the financial burden and stop the collection calls.

But before you go this route, be sure to conduct a cost-benefit analysis to make sure it’s worthwhile. If you’re able to find a loan with a low-interest rate and affordable payments or a credit card that offers an extended zero-interest promotional period, it may not be such a bad idea. However, a higher interest loan or credit card that starts accruing interest right away could land you into a mountain of debt and even more financial trouble.

How to Deal with Medical Debt Collectors

What if the debt is already in collections and none of these options are available to you? There are still ways to resolve your medical debts.

For starters, you should know that the three credit bureaus – Equifax, Experian, and TransUnion – have to wait at least 180 days before they can place outstanding medical debt on your credit profile. So, this gives you an ample amount of time to work towards reaching a resolution.

But if you’ve already passed this point, here are some additional suggestions:

Dispute the debt.

Collection agencies buy debt for pennies on the dollar, so it’s not uncommon for the balances to get passed from one company to another and documentation sometimes slips through the cracks. This could be good news for you as the burden of proof is on the debt collector to prove that you actually owe the debt should you decide to file a dispute.

So, you can take your chances by filing a formal dispute with each of the credit bureaus. And if the collection agency is unable to provide ample documentation or doesn’t bother to respond because they don’t feel it’s worthwhile, the debt will be removed from your credit report and you’ll be off the hook for the balance. (Quick note: if they decide to sell the debt to someone else, you’ll have to restart the process all over again).

Negotiate a pay-for-deletion agreement.

If the debt collector is able to provide proof that you owe, you can try negotiating a pay for deletion. In essence, you’re requesting that they accept a portion of the balance owed to settle the debt. It also means that they will remove it from your credit report and stop pursuing you.

It may take some time to get the debt collector on board. But when they do bite the bait, be sure to get the agreement in writing and uphold your end of the bargain.

The Bottom Line

Dealing with medical debt can be stressful and downright overwhelming. But by taking the time to address the issue and either working to find a solution or hiring someone to do it for you, you’ll find the relief you’re seeking sooner than later.

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