Sunday, December 29, 2013

Can't Pay Your Medical Bills? Re-posting My Most Viewed Post

This is my most viewed post for a reason: Americans can't pay their medical bills. 

President Obama's Affordable Care Act, which took several years to implement, has already helped many people get access to health care and to affordable insurance. It will help more people in the future. That's great, because it means that you get medical care and you don't get skinned on the price of care. You just present your insurance card and you are guaranteed to not be held up in a big way for cash on the spot. But wait, yes, you still might be expected to fork over a co-pay. Oh. That's why this post is still relevant. Because many of us do not have the cash to pay our medical bills. Or, if we pay the up-front charge, we can't pay some other bill waiting at home, and we certainly can't pay the remainder of the provider's charges, often multiple bills that show up in the mail later.

Sure, Medicaid is an option. But what if you have medical bills from doctors who don't take Medicaid, or from times when you weren't on Medicaid, or from bills that Medicaid won't pay? And what about people whose income technically indicates that they can afford to pay for health insurance, but whose personal financial situation of being deeply in credit card or other debt means they actually don't have any money to pay their bills? Aha. There's the catch. 

Despite medical insurance of various stripes finally being available to us all, plenty of us still cannot pay the actual medical bills that eventually trickle or pour into our mailboxes. If we can't pay promptly, the phone calls start. Each provider or bill collector wants us to pay in full, and forget about paying anyone else or even having enough money to eat that month. Your immediate goal is to stop the provider from putting you into collection or initiating a lawsuit against you. Your financial goal is to pay the very minimum amount you can wrestle out of the provider, and to only agree to a payment schedule you have a chance of meeting.

Here’s the basic scenario: 

1. Ask the provider to write off your portion of the bill after your insurance company has paid its share. Sometimes they will, if they’ve gotten enough from your insurer. Sometimes they will even if they’ve gotten nothing.

2. Negotiate the bill lower. Whether you have insurance or not, your goal is to pay between 5 and 50 percent of what you owe, max. Start your offer at 5 percent and let them negotiate you up. The main argument if you have insurance is they’ve already been paid a reasonable amount. The main argument if you don't have insurance that covered the procedure is they have billed you the utter maximum, and you want the bill to be cut to the remaining portion an insured person would be billed. Ideally, far lower.

3. Ask for a payment plan. By now they know you seriously care about the bill you owe, since you've talked to them repeatedly and maybe even called them on your own, trying to do something about paying it. They also know you can't pay it now. If they haven’t offered already, ask to make interest-free payments, stretched over a very long time. A year or more. These payments should give you space to recover first. Perhaps you can arrange to pay them a token fee now, or perhaps not. Then in six months, when you have regained your health, you’ll start making small monthly payments. Don't agree to a schedule that starts right now if you have no hope of meeting it. Try for delayed payments. Six months or a year later, if you still don’t have the money, try the scenario from the top, asking them to forgo payment entirely. Some dentists have payment plans that involve credit card companies and steep interest if you don't pay on time. Try to avoid this formal payment system, as it could drive you deeper in debt if you are short on cash.

4. Ask to be granted charity status. If you know you can never pay a medical bill---for instance, a hospital stay in the tens of thousands of dollars---present a written request on your own or ask to fill out their paperwork for being granted charity status. This is better than having a bill written off, which might produce tax consequences as supposedly "earned" income. When you know you can never pay, charity status is the way to go. You'll have to document why you are a plausible charity case, but most people who are in this situation have plenty of paperwork proving it already, and little shame or embarrassment about admitting that they're out of money. If one medical supplier grants you charity status, include a copy of that supplier's grant letter in your application for charity status to the next supplier. There are zero tax consequences to being granted charity status.

5. Speak to the doctor directly. Or write the doctor directly. If you like writing letters or aren’t afraid to ask your doctor in person, that’s a very effective method of asking for your bill to be drastically reduced or even entirely forgiven. The boss can do what the workers can’t.

6. Asking the doctor to cut the fee applies even to the co-pay. You'll probably never get a refund, so call in advance and ask in advance not to be charged the co-pay or the usual price of a procedure or visit about which you have advance notice. You can also write in advance, or have a negotiator (it could be a family member) call or write on your behalf. If you feel too ill to be up to these tasks, ask someone you know to help you. Usually an office manager will ask the doctor and get back to you with an answer. If it isn't the answer you like, and you have other options such as a different medical provider, pursue them.

7. If bill collectors do start calling, you have rights. The Federal Trade Commission has a great Consumer Information page that details the major rules under the Fair Debt Collection Practices Act. Best of all, you have the right to tell bill collectors to stop calling you. Check out the FTC page so you'll be aware of what debt collection practices are not allowed. Your state may have specific collection laws as well. Hopefully, they'll be in your favor. Most important, don't yield to the pressure that bill collectors exert. You know your financial and medical situation best, so don't agree to what they demand just to try to get them to stop calling. Use the method the law provides.

8. If you do get a notice that you're being sued over a medical bill, don't ignore it. Then you'll lose your chance to fight. You likely don't have the money to hire a lawyer, but you can call your local bar association to get the name of an attorney who will work for you pro bono---free. They do exist and it's not a big deal to find one. You qualify based on your lack of income or other circumstances. The important thing is to get legal representation, so a judge doesn't just take the medical provider's word for what you owe. After all, many medical bills are inflated, or duplications, or just plain wrong. If you miss your date in court, you automatically lose your case. And by the way, even at this stage you can try to get charity status from the very same company that is suing you. You can ask your lawyer to send the medical provider a letter.

9. What if you've tried everything, and you still owe some monstrous bill from a hospital that insists you are rich and should pay? Ask for the surgical report on your procedure, which you have a right to by law, and/or whatever records or notes there are for anything, such as a hospital stay, an in-office procedure, anything. Have an unbiased medical professional review it for errors. Medical providers make mistakes all the time. If your records show that a mistake was made, or that something, perhaps an unexpected stay in ICU or some behavior that your medical consultant flags as not according to usual standards, suggests that you were not given correct care, then, with that proof in hand, it's time to call or write and suggest that you should not be liable for the bill because they made a mistake.

The mere whiff of a suggestion that there's a possibility that you might have a malpractice case (is that vague enough? because you are not going to call up and say "I'll sue you") will make the medical provider sit up and start thinking. You will get action. It is quite likely that the response will be a letter saying, no, no mistakes were made, but according to their records, you don't owe them any money.

Yes, this really happens. Medical providers are so afraid of being sued that the mere hint that you might possibly have a case against them may be enough to get them to "lose" your bill permanently.

Or, depending on what the records have revealed, you might be better off finding a contingency lawyer and suing. A mistake that worsens your health or puts your life at risk is an actionable event.

10. Sometimes the issue may be that a medical bill is incorrect, either for a large amount of money or for a smaller sum. As Jay Lake has discovered, some medical billing issues go around and around because the low-level employees of the medical providers and the low-level employees of the health insurance companies keep denying that they have any responsibility to resolve an error. They simply keep passing the buck. They'd rather you just paid what you do NOT owe than fix the error. Bill collectors often say the same thing: "Why don't you just pay it?" When that happens, it's time to tell your story to the local action line, time to file a complaint at the state level, and definitely time to contact your local legislative representatives and get some help. Nobody should pressure you to pay a bill you don't even owe. A pro bono lawyer should be able to cut through the nonsense in this situation, as well. 

The reality is that with or without insurance, any health blip can become a financial disaster. Although the new health care law will change many of these situations, here are some tools you can and should stockpile before the catastrophe:

1. Supplemental insurance. If you know you won’t have money to pay the remaining owed portion if you get seriously ill, buy insurance to pay that part. You’ve seen those TV ads for supplemental insurance; this is what they’re all about. When 80 percent coverage isn’t enough, there is a way to be insured to cover the other 20 percent. If you’ve got serious ongoing health problems such as heart disease or cancer, that additional coverage could be crucial. Those cheapie “we’ll pay you cash every day you’re in the hospital” policies may also help you out a little, but they’re unlikely to cover the enormous multiple expenses that can be incurred in just a one-day visit to the Emergency Room or the ICU.
2. Catastrophic health coverage. This is one of the cheap options of the ACA. Do not imagine that paying the federal fine for not having health insurance is cheaper than having insurance. The entire point of insurance is to cover you for catastrophes. Catastrophes happen to us all. You’ll have to pony up the first $5,000 or $10,000 before its benefits kick in, and, yes, you have to pay monthly premiums. It's insurance. It'll save you from having to pay $100,000 for a surprise stint in ICU.
3. State-funded health insurance plan based on your income or diagnosis. Some states have completely free coverage for certain diseases, such as HIV/AIDS, or breast cancer. Some states have coverage for people below a certain income. These vary by state, and some states aren’t generous. (A good reason to consider where you live based on state politics and resources.) Some states have expanded Medicaid under the ACA. Make sure you apply through the ACA portal, or you might get the runaround from old line Medicaid employees who are still existing on a parallel plane and apparently know nothing about ACA.
4. Social Security, either Disability or Supplemental. Either one will qualify you for a health insurance program (Medicare or Medicaid), but they aren’t easy to get. Disability is almost always an automatic rejection. There are companies and lawyers who will help you. Use them, as it takes years otherwise. The Social Security Administration posted a goal a while back of giving a first reply within 270 days. That’s a goal, not a track record.
5. Medical Billing Advocate. There aren’t a lot of these people around, but they’re pros at making sure you aren’t being overbilled by hospitals, labs, and doctors. They can bargain with your medical creditors to settle your medical bills for far lower than the invoiced amount.
6. Social Worker. There is a persistent myth that social workers actually exist who can help you and who want to help. Maybe when you’re trying to get public assistance, there actually will be a sympathetic social worker who wants to keep you from becoming homeless. Maybe not. Maybe there will be a hospital social worker who makes an effort to help you. Maybe not. At least while you’re waiting to see this probably overworked and burnt-out professional, you’re not at home stewing over bills you can’t pay, and you’re in a heated or air conditioned building, too, something that you might not have at home anymore.
7. Statute of Limitations. Perhaps you haven’t been able to access any of the prior listed methods of paying your medical bills. Each state has a statute of limitations on past due bills, and sometimes that’s only three years. Collectors are supposed to stop calling once you speak to them and ask them in writing to stop, but examples abound of collectors not acting in a legal manner. Put a stop to it. Three years of being called by bill collectors is probably enough purgatory for anyone. Tell any bill collector you no longer are legally liable to pay, and they must drop the case and stop calling. If they overstep their legal authority—which is a constant problem with bill collectors—report them promptly to the state agency that regulates them.

Of course the real answer to the problem of medical bills you can’t pay is to change our health care system at the core. We're on our way, but we aren't there yet.