Ask The Money Coach

Posts Tagged ‘Access Project’

Q: I Have Over $5,000 Worth of Delinquent Hospital Bills on My Credit Reports. How Can I Get This Debt Down?

A: It will take multiple steps to help you eliminate your medical debt. But here are six strategies you can use to knock down those hospital bills and improve your credit rating.

Examine Everything

Start by going over all your medical bills with a fine-tooth comb. Question charges that seem inflated (like that $20 bottle of aspirin). Also, ask for explanations from your healthcare providers regarding invoices for services you don’t recognize or understand. Simply forcing them to account for everything may result is certain charges being waived or reduced.

Find Out About State Freebies

Lots of states offer their residents free mandatory coverage or health insurance with small co-pays and low deductibles. If any of your treatment should have been covered by a state program, see if state resources can fill the gap and pay what you’ve been charged.

Ask Directly for Discounts

Ask the hospitals, clinics and healthcare professionals that serviced you whether or not you qualify for any discounts, charity, or write-downs of your total bill outstanding. Don’t be ashamed to let the hospital(s) know about your entire financial predicament. They may be more lenient if they know that you’re not working, are not insured, have lots of other debts, are a single mom, etc.

Request a Payment Plan

If you can talk to a kindly, flexible billing representative/hospital administrator, or even better, the doctor(s) who treated you, ask if you can get on a payment plan. Try to stretch out the plan for as long as reasonable in order to give yourself time to pay off all that you owe. If they agree to discount $2,000 of your original $5,000 in bills, then you’ll have $3,000 remaining to pay off over time. If you can commit to pay that off in two years, that means you’ll have to pay $125 a month ($3,000 divided by 24 months).

Negotiate to Improve Your Credit Rating

Also, while you are negotiating, request upfront that the hospital agree to delete all negative references to your credit files. They may only do it once you’ve completed your repayment plan. But that’s better than letting the late payment or collection information sit on your credit reports for seven years. Get any agreements in writing.

Get a Medical Advocate

Don’t give up on negotiating down that medical debt, or to improve your credit standing. Sometimes you have to go to multiple people or write numerous letters. But it will be worth it in the end if you can rid yourself of thousands of dollars of medical bills. If your own efforts don’t get you anywhere, get help from a third party, such as Access Project (http://www.accessproject.org) or Medical Bill Advocates (http://www.billadvocates.com). For those with hefty hospital bills, The Access Project’s Medical Debt Resolution Program can guide you through the maze of negotiating with insurance companies, medical providers and public programs to resolve your medical debt.

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Q: Can I Be Held Responsible for Medical Bills My Ex-Spouse Generated? She Was Covered on My Insurance Plan. We Just Signed Divorce Papers.

A: With medical collection activity on the rise, it is definitely possible that a hospital, clinic or healthcare provider could come after you to pay off healthcare bills incurred by your former spouse. In fact, in many states, healthcare providers use common law doctrines to force spouses of patients to pay outstanding medical debts. Even if you don’t live in a common law state, many states consider a wife or husband responsible for a spouse’s medical bills, provided the two were living together when the medical bills were generated. That’s the case in New Jersey, where I live. Here, the Supreme Court has ruled that both spouses are liable for the “necessary” expenses incurred by the other while living together; and medical services are considered “necessaries.”

Fortunately, there are some efforts underway to safeguard spouses (and ex-spouses) when a wife or husband has racked up big medical bills. For example, many consumer protection agencies advocate exempting spouses from medical debts altogether.

What Your Former Spouse Should Do

Meantime, to protect yourself, talk to your former wife (if that’s possible) and encourage her to set up a repayment plan for her medical debt. Suggest that she review her medical bills closely to make sure she wasn’t overcharged or double-billed for anything. And share with her the resources listed below. Ultimately, of course, what your ex-spouse does or does not do is out of your control. But here’s what you can control.

How to Protect Yourself

First off, keep close tabs on your own credit files. Signing up for a good credit monitoring service is a way to do this. (I use credit monitoring from FreeCreditReport.com and myFICO.com). Unpaid medical bills don’t usually appear in your credit reports. But if they go into collections, then those accounts will be listed in your Equifax, Experian and TransUnion credit files. So be especially watchful for any collection accounts that may pop up in the future that you might have to dispute. The Federal Reserve reports that more than 50% of collection records and 20% of lawsuits that appear on credit reports are due to medical debts.

Aside from monitoring your credit, you should contact your health insurance company to inquire about any medical invoices that they didn’t pay. Perhaps there was an oversight, a missing claims form, or simply some information that you can supply that would cause the insurer to cover some of the outstanding healthcare bills.

Know the Worst-Case Scenario

Also, examine any of her healthcare bills you may have copies of – to see if there were clauses or fine print that obligated you or her (or both of you) to pay whatever was not covered by insurance. Sometimes, healthcare providers will spell out what recourse they may pursue in the event of non-payment. Aside from damaging your credit will collections, judgments or lawsuits, healthcare providers may try to garnish wages, seize assets or put a lien against your home. These are extreme tactics, and will certainly not be used in every case. But you need to be aware of all possibilities. In the end, how aggressively a healthcare provider pursues a debt will largely depend on the laws in your state, the amount of debt owed, and the extent to which the provider thinks they can shake money out your or your ex spouse.

Resources for More Help

Lastly, if you do get socked with your former spouse’s medical bills in the future, reach out to a variety of consumer organizations that can help you with this issue. Some groups that have fought wrongful medical billing practices include:

Access Project             http://www.accessproject.org

Bill Advocates              http://www.billadvocates.com

Consumers Union         http://www.consumersunion.org

Hospital Debt Justice    http://www.hospitaldebtjustice.org

National Consumer Law Center            http://www.consumerlaw.org

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