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For many Americans, medical debt is a very serious matter. Studies between 2005 and 2013 showed that medical debts are the single largest contributor to personal bankruptcy filings in the U.S. According to the Consumer Financial Protection Bureau, half of all overdue debt on credit reports is from medical debt; one in five credit reports contains overdue medical debt; and 15 million consumers have only medical debt on their credit reports.

Sarah O’Leary, CEO of Exhale Healthcare Advocates, said there are protections in place to help consumers with their medical debt, and knowing what those protections are is key to properly handling the bills.

“First and foremost, know what your state’s medical debt collection laws are,” O’Leary said. “Many limit how collection agencies can approach you and what steps they can legally take. If the collector is threatening you, there are steps that can be taken to stop it.”

Dealing With a Medical Debt

In most states, doctors and other healthcare providers are allowed to contact you about a debt, as are collection agencies. But you have the right to challenge the debt and can tell the providers and collection agents to stop contacting you, O’Leary said.

“Since experts estimate 50% or more of all medical bills contain errors, it is prudent to challenge the bills with your healthcare provider,” she said.

Ask for an itemization of the bill, and request an internal audit. You can also visit free websites like healthcarebluebook.com, to see what a fair price for medical services should be based upon your ZIP code.

“It’s key to realize that healthcare provider pricing is arbitrary,” O’Leary said. “An MRI on one side of Main Street may cost $3,000, and $300 a block away. Seeing what something should cost and pushing back on the healthcare provider can help you avoid paying $500 for the 50-cent Band-Aid.”

O’Leary suggested patients also appeal any denial of claim by their insurer. “Most patients can get the claim denial overturned after one appeal,” she said. “It’s imperative that you know the parameters of your policy and are willing to do the work necessary to challenge the debt.”

Medical debts are consumer debts that are covered by the Fair Debt Collection Practices Act, and third-party debt collectors collecting medical debts fall within the protections of the FDCPA as long as the medical debt is in default, according to April Kuehnhoff, a staff attorney with the National Consumer Law Center.

“It can be complicated to determine when a medical debt in default,” she wrote in an email. “Especially when it can take months for insurance to determine what portion of the medical bill it will cover.”

It’s important to remember that the FDCPA, according to Kuehnhoff, does not apply to collection by creditors collecting their own debt using their own name, for example a hospital’s internal billing department collecting in the hospital’s name.

Other federal laws also may apply to medical debt collection, Kuehnhoff said, including the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act, the Fair Credit Reporting Act, Telephone Consumer Protection Act and numerous others. There are also relevant state laws that impact medical debt collection, so it is probably best to seek professional assistance if you feel there are errors and/or questionable collection actions taking place.

How to Pay Down Legitimate Medical Debt

Patient protections are outlined on the CFPB’s website. But the best way to get rid of medical debt, O’Leary said, is to never accrue it in the first place. To do that, she recommends understanding your coverage fully.

“The best step is to ask for upfront pricing and negotiate that cost prior to receiving any non-emergency test or procedure,” she said. “Make sure everyone who touches your case is in your network, and that you have all necessary pre-authorizations from your insurance company.”

For those who end up in medical debt as a result of an unexpected accident or illness, O’Leary offered the following tips.

  1. Never pay your medical bills before you know how much your insurance company is going to cover.
  2. Only pay the amount you owe based on the insurance coverage you have. If a healthcare provider tries to charge the insurer $300 for a Band-Aid and the insurer only pays $5, the healthcare provider might try to charge you the remaining amount of $295. This is called “balance billing” and is illegal in some states. If you receive this type of bill, report it to your insurance company and contact the healthcare provider in writing (preferably by certified mail) informing them that you do not owe the amount they’ve indicated.
  3. Contact the healthcare provider immediately if you receive bills that you legitimately owe (i.e., your policy does not cover, the itemized bill is correct and the service is competitively priced) but cannot pay in full. You can almost always work out a monthly payment plan that meets your financial limitations with your healthcare provider.

And never deal with a collection agency directly if you can help it, O’Leary said.

“Instead, approach the healthcare provider. They are often much more flexible in terms of lowering the debt and payment options,” she said. That won’t be possible for debts that have been purchased by a collection agency, but if the collection agency is working for the medical provider, you can still go directly to the provider.

Even after the debts are sold, the medical provider may have ongoing obligations to the patient, Kuehnhoff said. For example, providing billing details or medical records.

“Nonprofit hospitals also have ongoing obligations to provide information about financial assistance policies and are obligated to accept applications for financial assistance for 240 days after the patient’s first billing statement is sent post-discharge from the hospital,” Kuehnhoff said.

“For those who are unable to pay the debt at all, there are governmental service agencies that may be able to help,” O’Leary said.

How Medical Debt Affects Your Credit

A medical debt can appear on your credit report and hurt your credit score, but the credit scoring industry has taken some steps to make sure these bills don’t unduly penalize a person’s credit.

FICO announced several months ago that medical bills that were paid off would no longer affect FICO 9, the latest version of its credit score. VantageScore 3 also ignores paid collection accounts of all types. And the three major credit reporting agencies, Equifax, Experian and TransUnion, announced in early 2015 that they were going to change the way they investigated medical debt and would wait 180 days before adding the debt to consumers’ credit reports.

“Medical debt is viewed differently than other forms of debt because it’s often not a true reflection of your credit worthiness,” O’Leary said. “If you’re socked with $180,000 in debt from a heart operation and the insurance company is slow to pay the healthcare provider, it could hurt your credit rating unjustly. If a collections agency or healthcare provider ‘parked’ the debt on your account while they were waiting for the insurance company to pay it, that would also be immediately removed once the insurance company pays the debt.”

Still, many lenders still use older versions of credit scores that do not give medical collections any special treatment. So, if you have outstanding medical bills, or even if you don’t, it’s a good idea to review your free annual credit reports for accuracy and dispute any errors you find. You can also get your credit scores for free every 30 days on Credit.com to keep an eye on any fluctuations.

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