Medical DebtMedical debt isn’t like any other debt. Unlike a home, car, an impulsive purchase you splurged on, medical services are a necessity. Landing in the ER or undergoing a must-have procedure for health reasons shouldn’t leave you in debt. According to a survey of 1,160 Americans over the age of 18, 3 in 10 reported someone from their household had trouble paying medical debt.

Coding, provider, and billing department

Even the language that surrounds this type of debt is unlike any other. The Miami financial consultants know there’s a bunch of codes involved, health insurance providers involved (for those who are insured), hospital billing departments not to mention related services and physicians such as ambulances, pharmacies, anesthesiologists and the like. Medical debt is also an issue for those who carry health insurance what with huge out of pocket deductibles that are sometimes impossible to pay.

Credit bureaus and debt collectors

debt collectors medical billsBut there are things you can do to deal with such debt, without having to file bankruptcy or dealing with debt collectors. First you should know that unlike other unpaid bills, medical debt typically isn’t reported to credit bureaus until it lands in the hands of debt collectors. Even then, debt collectors still have to wait about 6 months before reporting it, giving you more time to pay it off or perhaps handle your insurance provider.

How’s your credit score affected?

The Miami financial consultants want you to remember though that once that happens, your credit score will be affected, however less than other if it were another type of debt, especially with the new FICO credit scoring system. That medical debt will stay there for about seven years, and you could also be sued for what you owe. Wages can be garnished and assets can be taken away through a court-ordered bank levy. The statute of limitations of unpaid medical bills vary by state, for some it’s three years, for others up to 15 at which point creditors can’t go after you.

So how do you best deal with medical debt?

medical debtNever ignore the medical bill and double check them. Don’t just bury your head in the sand about it. The Miami financial consultants want to remind you that you can negotiate your bill. A hospital will be easier to work with than debt collectors, just make sure you check for errors. Ask for an itemized bill so you can see the exact breakdown of services and medication used. You’ll see if t hey did tests, gave you an IV, what procedure they did and figure out it matches what you experienced in you hospital visit.

If you have health insurance, ask your provider for explanation of benefits, because they may even be asked to overpay if the coding is wrong on services. The Miami financial consultants want you to watch out for double billing, incorrect patient information, charges for canceled tests and wrong dosage of medication.

Document all conversations

When negotiating medical debt with the hospital’s billing department, make sure you take notes on who you talked to, what they said and resolution that was offered. Ask to also have everything in writing, especially if there was an offer made or any other commitment made. Log in the date, time and any detail pertaining to the conversation. Don’t forget, you’ll probably hear a lot of “no’s” at first, and will need to make multiple phone calls until you can gain some leverage.

Negotiate for a reduced payment

Negotiate reduced paymentsBe honest about not being able to pay the full amount, but let them know you’re open to work out a fair amount. If you can pay the bill all at once and upfront in cash, you’re especially in a good position. You can try to negotiate the bill down by 25% to 30%. You can use Healthcare Bluebook to estimate what an insurance provider and other hospitals in the area would have paid for those same services, giving you more power to make an argument. If there were errors discovered in the itemized list, bring those up.

Look into medical debt assistance programs

Once you know you have a medical bill that matches the services you received, the Miami financial consultants suggest you ask about financial assistance or charity programs. If you’re on a low income, don’t have a job or are uninsured, you may be able to get help. Medicaid can also be an option if you qualify, since they’ll cover up to 3 months retroactively.

Get a payment plan

Once you feel you’ve gotten too a final number, negotiate a payment plan so you can pay off your medical debt in installments. Just again, the Miami financial consultants remind you to get the agreement in writing.