Tackling Medical Debt

Leave a Comment
May 28th, 2014

Medical DebtThe current state of medical debt across the US has begun to prompt providers to consider alternate action when attempting to collect unpaid medical bills.

Currently, more than 50% of patients will struggle to pay medical debt this year, according to the Patient Advocate Foundation (PAF), a non-profit organization that provides patients with chronic, debilitating and life-threatening diseases with one-to-one, sustained case management. The study includes a quantitive analysis of information on 88,364 patients who sought help from the organization in 2013.

Medical debt has now become the most frequently reported healthcare difficulty for patients and is one of the leading cause of bankruptcy in the US, contributing to almost 62% of individual filings each year.

The struggle to pay medical debt extends beyond the privately insured. While 14% of privately insured individuals report struggles with paying medical bills, 25% of individuals with public coverage and 36% of uninsured individuals have also been affected.

What Providers Are Doing About Medical Debt

Provider advocates have been keen to point out that much of the medical debt can be contributed to the economic downturn and an increasing number of high-deductible insurance plans. To combat this trend, providers have started to implement alternate payment and billing strategies as they take a more aggressive approach to unpaid bills.

Traditionally, providers have taken action against outstanding debts by sending these bills to collection agencies within 180 days (6 months).  Now, many hospitals and physicians have decided or will consider taking action sooner and submitting unpaid bills to collection agencies within 6 – 8 weeks.

In an attempt to avoid sending such bills to a collection agencies and crippling a patient's credit score, some providers have chosen to allow patients the opportunity to pay for their treatments prior to receiving it. This upfront payment model has seen improvements of up to 25% less unpaid medical bills for some providers.

What To Do About Medical Debt

For patients, the possibility of facing damage to their credit scores or even bankruptcy should prompt actions to manage their medical bills with more scrutiny. Below are a number of tips to help patients deal with unpaid medical bills or medical debt:

  1. Don’t Ignore It

Be aware and prepared to pay your medical bills. Before being treated, make sure you know the costs associated with your treatment and how much you can honestly afford.

  1. Read the details

Read your bills carefully. Sometimes, asking for an itemized bill can show you exactly what you’re paying for and where your money is going. Also, medical bills can contain errors, double billing, and billing for non-administered services. Checking bills against your EOB can not only make sure there are no errors, but also allows you to see the amount already paid by your insurance provider.

  1. Negotiate

Medical bills are often negotiable. While insurance companies do this more often than not, patients can also negotiate with providers, especially if they are self-pay.

When negotiating, make your provider aware of financial capability. If possible discuss the option to set up a payment plan or alternate methods of payments that suit your budget. Just because your bill has been passed on to a collections agency doesn’t always mean you can’t negotiate with them too.

  1. Seek Assistance

If all else fails, seek assistance. Many local and national organizations have offices offering medical billing assistance services. Providers may also be able to assist by waiving unnecessary administration fees.

For those that are eligible, government funded programs can often help with paying outstanding bills, or you may even qualify for cost-sharing subsidies for plans bought through the health insurance marketplace.

PayerFusion remains a strong advocate for ensuring patients can affordably access the healthcare they need. Our case management team utilizes a number of cost-containing efforts and negotiation strategies in achieving the best price for both domestic and global payers. If you’d like to learn more about how PayerFusion can save insured lives money when paying medical bills, or you’d like to keep up with the latest news surrounding medical debt – subscribe to our monthly Health Insights newsletter here.