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Everyone needs medical care at some point in their lives. Unfortunately, medical bills can be extraordinarily high, and many people are unprepared financially for unexpected medical costs. Approximately 17.8 percent of Americans reported having medical debt in collections in June 2020, and one in four Americans have trouble paying medical bills in 2022.
Americans are swamped with medical debt and struggling to pay it. However, consumers may not realize that their medical debt may not be accurate. Mistakes on medical debt are common and can be costing consumers extra money (and headaches) without them knowing it. Here’s how to tell if you need to dispute a medical bill and how to write a medical bill dispute letter to get started.
Medical bills can show up on your credit report if you’ve missed payments or made late payments. The lender can report this information to the credit bureaus and, as a result, you could see a drop in your credit score.
However, in most situations, medical debt doesn’t show up with the first missed or late payment. Doctors and hospitals are simply too busy to report every minor payment transgression. Instead, they often wait until several payments have been missed in a row to proceed with reporting the information to the credit bureaus.
By this time, as several payments have been missed, the debt is often already in collections by the time it appears on your credit report. And having a collections record on your credit report can be particularly damaging.
If your medical bill is inaccurate in any way, it’s important to dispute it immediately. Unpaid medical bills can stay on your credit report for up to seven years, impacting your credit score and financial opportunities during this time.
Between insurance providers, hospitals and other parties, medical bills can be complicated. You’ll want to start the dispute process right away in the hope of rectifying the situation.
Some of the most common types of errors on medical bills are:
Incorrect information often happens due to human error. Frequently a doctor’s handwriting can be hard to read and the person filling out the patient information form makes a mistake in interpreting it. Or, a family member filling out the form for a relative makes a mistake, such as providing the wrong insurance information. These mistakes happen and can cost the patient if they’re not caught.
Your insurance provider should always send you an Explanation of Benefits (EOB) in response to any medical bill they receive. The EOB includes the treatments the insurer will cover as well as the amount not covered by your policy. Sometimes doctors and hospitals make a mistake and leave a charge on your final patient bill that your insurance provider has already paid.
If your employer offers an insurance policy that covers many states, where you get your treatment can make a huge difference. Receiving treatment outside your state could result in a higher medical bill due to differing levels of coverage in individual states. Always check that your invoice has the correct location of your ordering physician.
Unbundled charges are when charges are listed as separate services rather than a bundle. For example, testing for conditions like congestive heart failure, sepsis or a UTI requires several tests that should come in a slightly discounted bundle. Charging you separately for each test is technically correct (you did get all these services), but you should be billed for a bundle to get the savings.
Hospitals and insurance providers use codes for billing to identify procedures and services. Mistakes with these codes can happen, so you should watch out for them. Changing a single digit can change a bill line item from a simple, affordable service (like a checkup) to a major, expensive procedure (like heart surgery).
The three most commonly used code sets used are:
Luckily, there are free guides online where you can look up and confirm the proper codes have been used on your bill.
The last error to watch out for is inaccurate or duplicate charges. You could be charged for your hospital room twice. Or, you could have a bundle on your bill and some of the bundle charges also listed out separately. These errors can quickly raise your invoice and leave you paying more than necessary.
Self-pay patients are patients without insurance. These individuals should watch out for being charged excessively. One study found that hospitals charge uninsured and self-pay patients more than double the rate for the same services as insured patients. Some states have laws about how much hospitals and doctors can charge self-pay patients. Check your state and understand any protections you may have.
These are the steps to dispute a medical bill:
Make sure to receive an itemized bill from the hospital or your doctor and review it carefully. You should only see the services listed that you received. Additionally, watch out for any of the common errors we listed above.
If any part of your bill is confusing, talk to your doctor, as they may be able to provide an explanation.
If you find errors on your bill, the first step is to call the medical billing department. Sometimes a conversation directly with the provider can lead to a quick fix. If the medical billing department isn’t willing to work with you on a solution, contact your insurance provider next. Your insurance provider can be very motivated to help you fix medical billing errors, especially if it will save them money too.
Keep detailed notes on everything as you go through a medical bill dispute. Don’t give anyone your original hospital documents or bills—keep the originals for yourself and only share copies. Take notes when you talk to your doctor, medical billing department or insurance provider.
If having conversations with your medical billing department and insurance provider didn’t result in a fix, the next step is to file an official appeal with your insurer. Write a letter and include:
Send the letter of dispute by fax and mail to ensure your insurance provider receives it.
After you’ve successfully disputed your bill, you’ll receive a copy of your new, adjusted invoice. Remember—all medical bills are negotiable. If you can’t afford the new invoice, you can start negotiations with your medical provider. It’s better to negotiate your account down or establish a payment plan rather than fall behind and risk the medical bill being sent to collections.
As the number of medical bill errors is so high, an entire profession has sprung up to help people deal with these situations. Patient and medical billing advocates help you in the medical bill dispute process. They know the medical billing system and understand how to negotiate in a way that will get results.
If your medical bill has been sent to collections and you know it contains errors, you can write a debt validation request. In the letter, you can explain why you believe the bill is incorrect and ask the debt to be verified by the medical provider.
If none of the above steps work, you can choose to work with the credit bureaus to dispute errors. Under the FCRA, you’re entitled to an accurate credit report. You can file a dispute with the credit bureaus highlighting the errors on your report. The credit bureau will have 30 days to investigate after receiving your request. If they determine the information is incorrect, they may remove the collections record from your account.
If you need to dispute your medical bill directly with your hospital or healthcare provider, here’s a sample letter of a medical bill dispute to get you started. Be sure to provide your billing number and a copy of your itemized bill.
In March 2022, the three major credit bureaus (Experian®, Equifax® and TransUnion®) announced they’d be changing how they handle medical debt on consumer credit reports. Some of the changes being made are:
While these are all positive changes that will help consumers, it’s important to note that this won’t completely wipe medical debt from credit reports. Medical debt can still appear on your credit report, impacting your credit for up to seven years.
If your medical bill is sent to collections, reach out to the agency and begin negotiations. You can probably negotiate a lower payment for them, and in return, the debt will be marked as fully paid. And, as we highlighted above, once your medical debt is paid, it will now be dropped off your credit report! If you can settle within the first year of the debt being sent to collections, you can avoid it ever appearing on your credit report.
Don’t ignore medical debt sitting in collections. Debt collectors will start contacting you almost immediately in an attempt to collect. Additionally, the debt will impact your credit for seven years.
If you have medical debt that’s already impacting your credit score, consider the following steps:
Medical debt can be stressful, but it’s important to remember there are always possible solutions. You can work to pay off the debt and repair your credit simultaneously. If you can do both of these things, you’ll recover and be in a financially sound place. And if you don’t know where to start, consider using CreditRepair.com. Our professional advisors can help with both credit repair and credit education.
Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.
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