Home > Managing Debt > Surprise Medical Bill? Here’s How to Respond.

Comments 0 Comments

What happens when you discover an unpaid medical bill after it’s already destroyed your credit rating? A reader of Credit.com using the screen name “Sarah” told us in a comment on our blog about her medical bill nightmare, wondering what she could to do fix such a problem.

Sarah and her husband were excited to finally get their financial lives back on track. Hospitalized after a motorcycle accident years ago, Sarah’s husband owed a medical bill of over $11,000. The couple couldn’t afford to pay it immediately, so the bill went to collections. Gradually, they managed to pay it off.

“We just sent in the final check to pay off this balance,” she writes. “We WERE so excited thinking we are finally debt free.”

Immediately after paying off the old debt, Sarah and her husband tried to get preapproved for a mortgage. They were denied. They discovered their credit score was too low, due partly to another medical bill for $21,000 from the same old motorcycle accident.

This bill was entirely new to her, Sarah insists.

“We have never seen the bill or have been contacted about it but it was sent to collections without any knowledge of the bill existing at all,” she wrote.

[Credit Score Tool: Get your free credit score and report card from Credit.com]

Free Tool: Credit Report CardThey tried to confront the problem head-on, calling the collection company to say they never received the bill. But the employee they spoke to “didn’t believe us,” Sarah says.

The ramifications of this new, unexpected medical bill hit immediately. Not only could the couple not qualify for a mortgage, now they worry about Sarah’s husband’s wages being garnished to pay off the debt.

And the timing could not be worse.

“We have 1 baby and another due in 3 months,” Sarah writes. “What can we do? Anything?”

Perhaps surprisingly, many people find themselves in nearly the same situation, says Mark Rukavina, executive director of The Access Project, a nonprofit group that helps to improve health care access for low-income people in New England.

“This isn’t uncommon,” Rukavina sys. “It does happen that people discover these bills for the first time when they’re applying for a car or a house [loan].”

And yes, there are many steps that Sarah and people in her position can take. If she’s lucky, Rukavina says, some of these steps might make the bill disappear. More likely, however, is that the couple will have to pay the medical bill, or at least a portion of it.

The first thing Sarah should do, says Rukavina, is to track down documents of all her husband’s medical bills, including the one they already repaid and the one currently in collection. Request documents from the collections agency, the hospital and, if necessary, any medical providers involved in treatment (sometimes doctors may have privileges to work in a given hospital emergency room, but they may not be actual employees of the hospital or use the hospital’s billing system).

For more details on how to negotiate a medical bill, check out this story by Gerri Detweiler, Credit.com’s consumer credit expert.

[Related Article: Big Hospital Bill? Negotiate!]

“It’s a bit of sleuthing that’s involved here, especially if [the accident was] a few years back,” says Rukavina.

Once you have all these documents in hand, compare them. Maybe Sarah’s husband was double-billed for the same procedure. Or maybe the bill for the same procedure was sent to two different collections companies.

In that case, Sarah might have a chance of convincing the hospital to retract the new, larger bill.

“We’ve seen this kind of duplication,” Rukavina says.

In other cases, both bills really are legitimate. It’s possible the second one got lost in the mail, especially if the couple moved soon after the accident. Or perhaps the hospital never sent the bill to the couple. But those instances don’t happen very often, says Rukavina.

Far more likely, he thinks, is that the couple did receive the bill. But in the rush to respond to the accident, Sarah and her husband probably missed it. “I think in reality it’s pretty rare that it just goes straight to collections,” says Rukavina.

Even if the bill is completely legitimate, there may be steps Sarah can take to reduce it or lower its impact. First, they can ask the hospital for copies of its policies regarding charity care and medical hardship reimbursement for the indigent. Charity care is usually done for free, Rukavina says, whereas proving medical hardship for the indigent generally involves the hospital wiping away some — but not all — of the bill.

And depending on which state Sarah and her husband live in, their state government may offer programs that help people who earn below certain incomes to pay medical bills. Especially since the treatment happened years ago, people in Sarah’s situation should find out whether such state and hospital programs “can apply retroactively,” Rukavina says.

Finally, Sarah and her husband can appeal to the collections agency. The company may be willing to negotiate down the total amount that Sarah and her husband owe. And Sarah should use her bargaining power now, before she starts making payments, to get the company to agree in writing that it will remove the bill from the couple’s credit report as soon as it is repaid.

[Free Resource: Check your credit score and report card for free with Credit.com]

That’s important, Rukavina says, because one of the things that’s hurting the couple’s credit score right now is the fact that their recently paid bill is still showing up on their credit reports. And it won’t go away for another seven years.

“If you can get the collection agencies to agree to delete if you pay, then by all means, that’s the way to go. But they aren’t going to readily agree,” says Gerri Detweiler, Credit.com’s consumer credit expert. “Still, if you have a good reason why these ended up in collections (you never received a bill and didn’t know they were unpaid, for example), I’d recommend you push hard for the deletion.”

Either way, consumers should save this step as the last resort.

“If they determine that it’s not a duplicate bill,” Rukavina says, “and they’ve exhausted all other options of getting this thing paid by the hospital, then yes they should try to negotiate with the collections agency.”

Nothing in this process is assured, Rukavina warns. The collections agency may still have the power to garnish the couple’s wages or, if they own their home, to put a lien on their house. But by following these steps in order, Sarah and her husband have a slim chance of making this old medical bill disappear, and a better chance of reducing its size.

Image: Liber the poet, via Flickr

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team