V is for Victory over Medical Bills
Personal Finance from A to Z
Eileen St. Pierre, The Everyday Financial Planner
FICO recently announced it will introduce a new credit scoring model this fall that no longer weighs medical debt as heavily as in the past. As reported in The New York Times, medical debt accounts for about half of all unpaid collections on consumers’ credit reports. According to the Consumer Financial Protection Bureau, consumers are overly penalized for unpaid medical debt that goes to collections. With these new FICO scores, some consumers with medical debts may see their credit scores rise by as much as 25 points. It is unclear how many lenders will use the new score.
If you ever had to go to the hospital to have any kind of medical procedure done, you know how confusing it can be to stay on top of all the bills. I have a Ph.D. and even I’m confused.
Let me tell you about our current (and ongoing) experience with the bills following my husband’s surgery over three months ago. Before I start ranting, it’s important for you to know that we are extremely satisfied with the care my husband received. The surgeon did a wonderful job, and as a result my husband recovered very quickly. We have yet to pay much of anything out-of-pocket but we know that it is just a matter of time.
We found out just before pre-admissions testing that the hospital was out-of-network. Since specialized medical care is so hard to find where we live, we’re ok with that. We were also told to expect separate bills from the surgeon and anesthesiologist, as well as for any lab tests. Ok, I’ll be ready.
I have to admit I was a little shocked by how little insurance was going to pay when the claims were first processed. The insurance company decided to pay us instead of paying the medical providers directly. Why, I don’t know, but it has been a really big pain in the neck. Apparently it really slows down the billing process when medical providers do not get paid directly. I kept waiting for a bill from the hospital, but instead we got a letter from them asking us to forward the checks we received to them. Only then would they start billing us for what we owed.
Two months after the claims were first processed, they got resubmitted. Now the amounts we owed magically started to go down and the medical providers now started getting extra payments sent to them. I shouldn’t complain, but now I’m not sure how much we really owe. The bill from the surgeon arrived at the same time the claim was re-adjusted in our favor. Now he may be considered in-network. Huh?
We still have not heard from the anesthesiologist. According to the insurance company, we now owe her less than $100. But we haven’t received the updated Explanation of Benefits (EOB) and it is not available online. Even with the EOB, it can still be hard to follow insurance company math.
I want to be a good financial role model and start paying our bills. Despite over three months’ passing since the surgery, all the bills say we are current. You can rest assured that when we have finally finished paying these bills, I will check my husband’s credit report at www.annualcreditreport.com for any errors.
I have a folder specifically devoted to my husband’s surgical procedure. Many of you out there probably have folders thicker than mine. We should all get together for a drink one day and make a toast – V is for victory over medical bills!
Update: On the day this column was published, we found out the hospital is now considered in-network, so our bill was adjusted downward by over $3,500. I’m still confused, but not complaining.
For more information on health care issues, visit my Health Care Reform page.