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Reader Stops Mysterious Medical Bill From Damaging Her Credit

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Sometimes bad credit happens to good people. A reader recently wrote to us about a problem she was having with a medical collection account on her credit reports. While traveling, she saw a physician who misdiagnosed her and the following day she wound up in the emergency room. She never received a bill from the original doctor, though she did send him a dispute letter. She says:

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I did this because I was upset that I was sent away and then had to spend thousands at the emergency room a few days later.  I figured that it was worth a try and that if he really wanted to argue the small $80 charge that I would pay it if they sent the statement.

What happened next is not unusual.


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About a week ago, I receive a letter from a collection agency. .. I sent in an official “Dispute” letter to them due to the fact that I have never received a statement from the Physician’s office. .. The collection agency sent me a statement from the doctor’s office that had the wrong address on it.  The city was not even a city where I have ever been before.  I am not sure how they would have a complete incorrect address, as I filled out paperwork that has my current address on it, not to mention my insurance information has the correct address on it.   At this point I really do not know what to do.

Should I just pay the small bill ($88) to the collection agency and request that they do not turn in any of this information into the Credit Bureau?  Or if I keep disputing this charge do you think that I have a chance of getting it removed due to the proof of the wrong address on the statements and copies of all of my letters? “  – Marilyn (name changed for privacy)

Sadly, having a collection appear on your credit report for a medical bill you never received is all too common. There is no federal law that specifically prevents this practice, and over the years we’ve received many complaints from individuals for whom the first time they heard about about an unpaid medical bill was from the collection agency asking them to pay it.

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I spoke with Marilyn and we discussed her options. She already understood that even if she paid the collection account it would stay on her credit reports and could hurt her credit scores for a long time. I pointed out to her that FICO ignores collection accounts with original balances of less than $100 when calculating credit scores, but that’s only in more recent FICO scoring models.

I explained that the collection agency may be willing to agree not to report it if she would pay it in full, but I told her that it was essential to get any agreement like that in writing before she paid. Otherwise she would be stuck – and have no negotiating leverage. Collection agencies certainly aren’t required to agree to those kinds of requests, but it never hurts to ask.

At that point, Marilyn said that the collection agency had been pretty pleasant to deal with so she decided to give it a try. Here’s what happened next:

They informed me that I would not be able to receive such letter because they do not send anything out like that in writing.  These people are ruthless.  She said that they would be turning everything into the Credit Bureau by the end of the month.  I guess at this point do I continue to dispute the debt?  If I contact the Doctor’s office directly can they do anything at this point since they have sold the debt to this collection company?

At that point, my suggestion was that Marilyn talk with the doctor’s office and try to get them to take the account back from the collection agency. I told her she could agree to pay the doctor’s office directly. Considering that they never sent her a bill, it seemed like a reasonable request. She agreed, and soon after she shared news of her success:

I have just gotten off of the phone with the Physician’s office.  They have agreed to call the collections office that they turned my debt in to and withdraw my amount.  I asked for written confirmation… Hopefully nothing has been turned into the credit bureau as of yet…

I cannot thank you enough for all of your assistance that you have provided regarding this issue.  I have learned that in the future I will probably not “get smart” and dispute a doctor’s office visit unless it is something that is very significant.  I have never had so much stress over $88 dollars in my life!

While that is great news, what worked for Marilyn may not work for you. If you are in a similar situation, don’t hesitate to contact a consumer law attorney with experience in credit reporting issues for help.

Do you have a success story of your own to share? Send it to me at creditexperts@credit.com.

Image: Joelk75, via Flickr

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  • Erin McIntyre

    I just received collections notices for my college aged son’s hospitalization in March of this year. Neither of us received a bill from ANY doctor or even the hospital. He had full coverage, wherein we wouldn’t expect to receive a bill. Now they are ruining his credit. The woman I spoke to with the collection agency was horrible, and stated we should have contacted the “creditors” from the Explanations of Benefits from the Primary Insurance. However, the Secondary Insurance was to cover the balance of the debt. I have worked in medical billing and know that it takes quite some time for both entities to finish their reimbursements. This doctor’s office went too far. What can we do to keep my son’s credit in tact?

    • Gerri Detweiler

      Erin – This is a very common problem and you’re not the first one to run into a situation where a medical bill is in collections before you have the chance to investigate or pay it.

      However, you do have at least rights. The collection agency by law must verify the debt upon your request. Ask them, in writing, to verify the debt. You also have the right to dispute it on his/your credit reports. Go ahead and get free credit reports at AnnualCreditReport.com. If the collection account is on there, then dispute it in writing (not online) if you believe any information is inaccurate and incomplete. Then use our Free Credit Report Card to monitor you/ your son’s credit scores.

      But ultimately what you have to get at here is why these charges wound up in collections and if there is anything you can do about it. I’d suggest you read this companion article I wrote, An Insider’s Guide to Fighting Medical Billing Mistakes, for suggestions on how to do that. They may have failed to bill your secondary insurance or may be trying to balance bill you, either of which is problematic. Once you find out what the issue is then you can try to resolve it. Ultimately, as you know, your goal is to get it off your credit reports and hopefully this article will help you understand how to do that.

      And please be sure to file a complaint with the Consumer Financial Protection Bureau. They need to hear what kinds of problems patients are experiencing with regards to medical collection accounts on credit reports.

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  • Scott HIgbee

    I had hand surgery last September and started OT in October. When I went to the therapy office, which is run by a large public hospital in town, the office staff took my insurance information and told me and wrote on the financial form that I had a zero co-pay. My doctor wanted aggressive therapy and my therapist (who is wonderful) had me come twice a week for months. Then in March I received a bill that showed the full billed amount, the amount paid by my insurance, the adjusted out amount and a co-pay of $440. This looks to be for only the first few months of therapy. I believe my ability to make informed consent was taken away from me. I would have gone less frequently or at least stopped twice a week sessions before I did. I have informed the hospital of their error and had some assistance from someone from my insurance company. Someone who works with my wife at a home health agency used to work in the hospital’s billing department. She stated that the hospital is in the wrong and has the responsbility of telling the correct bill amount at the beginning of services. The hospital’s response is that it is my responsibility to know my insurance plan. I trusted them to tell me the right information. The person with the insurance company stated that they should have known that there was a co-pay when they ran my insurance information. What are my rights? Thank you.

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