How to Handle Medical Debt: 6 Important Tips

Medical Bill

No matter how good your health insurance is, you can virtually count on owing money out of pocket after a substantial medical procedure. If you’re lucky it will only be a few hundred dollars, but several thousand is hardly unusual.

If this happens to you, the best approach is to take control of the situation from the beginning, and see it through to the end. You may be pleasantly surprised how it all turns out.

1. Verify your coverage in advance.

You won’t be able to do this in the event of an emergency situation, but in all other cases you should have ample time—take advantage of it. Never assume that a procedure is covered just because you have health insurance. It may not be, and even if it is you will almost certainly be required to pay at least part of it. Deductibles and co-insurance provisions guarantee that.

Your healthcare provider is normally responsible to verify coverage with your health insurance company, but make sure that you follow right behind them and do it yourself too. This will provide two advantages:

  1. You’ll be certain of your coverage, and not just taking the healthcare providers word—they DO make mistakes.
  2. Your verification plus your healthcare provider’s verification will make it pretty certain that the procedure is covered.

One more thing you need to get is a pre-certification of coverage, and this will be a written form confirming that your health insurance company has accepted responsibility for coverage of the named procedure. Having this form will solve most of the billing mistakes that will come later. Your healthcare provider should obtain this before any procedure, but never take their word for it. Make sure you have this form before any medical procedures.

2. Be proactive when the medical bills come in.

Medical bills tend to drip in slowly over many months following a medical procedure, and that can cause you to doubt their importance. There’s even a tendency to ignore them under the assumption that your insurance company will pay them. Instead, collect every medical bill, every insurance summary of benefits and all correspondence of any sort related to your procedure and keep it in a central file. You will need these documents as the process unfolds.

3. Check for errors.

As bills come in, you’ll want to check for errors. Part of the reason you want to collect your bills in a single location is so that you can compare bills as they come in. By having everything in one place, you can compare bills to look for duplicate bills. There’s also a chance you’ll be charged for procedures that were never done. Look over the bills regularly to make sure this isn’t happening.

If it is, contact your healthcare provider(s) immediately to dispute the charges. Do this when the bills come in; the more time that passes, the harder it will be to file and prove a dispute.

4. Negotiate a payment plan.

There’s no getting around the fact that you’re going to owe at least some money even after insurance pays its portion. As soon as that becomes evident, contact the business department of the healthcare provider in question to set up a payment plan.

By doing this early, you show that you fully intend to pay your obligations, and that will help you in obtaining favorable terms. Most healthcare providers will set you up with a low monthly payment, and often without any interest charges. Be confident in approaching them and work out the best deal you can.

Make sure that any payment plans are accepted by the provider in writing.

5. Offer to settle balances for less than the full amount.

If you’re in a position to pay a good sized chunk of the bill, contact the provider and ask if you can work out a settlement. If you get a bill for $2,000, and you have $1,000 to pay it now, see if they’ll accept it as full payment for the balance due. Many providers will because it’s a chance to get the money up front. The sooner they can get it, the less chance there is that the obligation will be defaulted on.

You can also ask if you can get some sort of hardship consideration. Many healthcare providers will do so if you can show them that you lack the ability to pay, or can at least pay a small part of the obligation. Never be afraid to request any kind of settlement, even if you’ve never done so in the past. Many times, the healthcare provider wants to close the books on your account as much as you do.

Once again, make sure that any settlements are accepted by the provider in writing.

6. Check your credit report after the dust settles.

When it comes to medical debt, there’s one very important last step: after you pay all the medical bills, get a copy of your credit report for free.

You’ll be arranging payment schedules and payment settlements for less than the full amount owed, so you want to be sure that the healthcare provider doesn’t report any of the arrangements in a way that will damage your credit. Do this early, while you still have all of your documentation handy. Those documents, especially the ones confirming your payment plans and settlements, will be your best assets in the event that any information shows up as a derogatory entry on your credit report.

As unpleasant as it may seem, it’s very important to take ownership of medical debt as soon as it becomes apparent. Never let it sit thinking that it will just go away—it won’t. You almost certainly won’t have to pay the full amount due, but you’ll have to do some investigating and communicating to make that happen.

Have you ever had large medical debt to pay? How did you handle it?















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  1. I notice a number of bills where the error is in favor the vendor. I used to have a pay as you go phone plan for 38 cents a minute and $12 a month. The phone would be in a drawer turned off and even the battery was dead for months at a time. There are only 2 adults here. Repeatedly, I would see an extra charge for 1or 2 minutes every month. Not enough to warrant a phone call to investigate, but multiply that times thousands of phones. My Discover card charged me $1.80 one month for payment protection. I never signed up for that and seldom use the card. There are other examples, but here is the biggy. The hospital over a year sent me 14 bills. Each one charged me the amount the insurance deducted. They physician’s bill was always perfect, but that was done by a different billing agency. I was told it was a “training issue.” A year goes by and another procedure was done and again the bills come in with the same kind of error. The moral is to read your bill. But few of us have the time to research the errors and mail in the documentation in our busy lives.

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