Dealing with medical debt: Part 1

Review medical bills and get organized.

Many consumers are struggling with medical debt. The Consumer Financial Protection Bureau (CFPB) reports that 52 percent of all collections on credit reports are due to medical debt. In addition, since September 2013, debt collection is the CFPB’s top complaint! 

So, what can consumers do to better manage medical debt? The CFPB suggests the following tips: 

  • Review all medical bills. Do you recognize the provider and if not, verify the date of service to make sure you actually received treatment on that day. For complicated services, request an itemized bill from your provider to see how much you were charged for each service. Also, make sure that your medical services were submitted to your insurance company (i.e. some providers bill their patients directly) and if they weren’t, find out what steps need to be taken so that they will be.
  • Organize all medical documentation. Keep good records. Should you need to dispute a bill, send a written notice to the provider with a copy of all relevant records (i.e. bills, credit card statements, insurance explanation of benefits, etc.). Always keep original documents and only send photocopies.

Tip: Consider sending your dispute certified mail with return receipt, so that you have proof that the letter was indeed received.

  • Make sure that your medical provider has your current health insurance information. Small errors can lead to big bills! Verify account numbers, spelling of names and birth dates.
  • Respond to medical bills quickly. If you have confirmed that you owe the bill, verify what portion your insurance is paying (if any) and try to pay your portion right away. Remember, if you don’t pay it on time and it gets turned over to collections, it can negatively impact your credit. In the event you choose to dispute a bill, be sure to do so right away.

The next article in this series will address negotiating bills and seeking assistance. 

For a variety of financial resources, including how to develop a monthly budget, visit Michigan State University Extension or MI Money Health.

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