Advice on Medical Bills & Insurance Claims

Upon reviewing my credit report I found numerous negative medical bills, turns out that the claims were not filed correctly.

Upon reviewing my credit report I found numerous negative medical bills on my report. After further investigation I found out the providers had not submitted the claims to the correct administrators even after receiving information from the insurance company. Since my employer has changed carriers, the previous carrier says it will not pay the claims. Do I have legal right to ask them to be removed from my credit report because I have no control over the filing of these claims?

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Bill's Answer
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Bills.com Team
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Highlights


  • Medical debts in collections can appear on your credit report.
  • You are responsible for correcting any billing errors.
  • Resolve any debts in order to avoid negative marks on your credit report.

Insurance questions are difficult to resolve because they involve three parties, including the:

  • Insurance company or claims administrator
  • Medical service provider
  • Patient or insured party

Your question touches on three possible problems:

  • The insurance company denied the claim(s) in error
  • The provider submitted the claim(s) incorrectly or after the deadline
  • The service provided was one not included in your insurance coverage

Here, it appears the medical provider filed the claims incorrectly. This is frustrating for patients because medical providers almost always require a patient or insured party to sign a waiver stating the patient will pay the bill if the insurance provider denies the claim. That seems an unfair and one-sided contract.

If a doctor tells you, “My office will probably goof-up the billing. Want us to handle it for you?” You would probably say, “No, thanks, I’ll do it myself or find a doctor who hires competent billing people.”

Your expectation was the medical provider would, once it agreed to handle the insurance forms, take reasonable care in processing your insurance claim. But it failed, and now demand you pay for its incompetence. You mentioned resubmitting the claim to the insurance company. The insurance company rejected the claim based on a failure to meet a deadline.

A cynic would view insurance deadlines as arbitrary, and intended to accomplish exactly what you described in your question — an excuse to deny a claim. However, the medical provider is still to blame when they miss a deadline for two reasons:

  1. They were put on notice of the deadline when they agreed to join the insurance provider’s network
  2. The provider had the information necessary to make a claim.

See the Bills.com article to learn more about how health insurance companies process claims.

Credit Report & Delinquent Medical Debt

You have no legal right to require the consumer credit reporting agencies or the medical providers to remove the delinquent accounts from your . The medical provider will claim you have liability for the debts. Regardless of any issues you may have had with your insurance, the waiver you probably signed gives the medical provider an argument you owe the debt, even if the provider submitted the insurance claim in an incompetent manner. The medical provider may claim you were responsible for notifying the provider of the new insurance information, or you should have paid the bill and filed the insurance claims yourself.

How to Handle Medical Debt

No law requires a medical provider to file an insurance claim on a patient’s behalf. Providers do so as a courtesy to patients, and to help ensure the provider is paid in a timely manner. Review the following table to learn how to handle common medical claim problems.

Medical Bills & Medical Insurance Claims
Insurance Claim Problem Patient Liability & What To Do
How to handle common medical insurance claim problems. Source: Bills.com
Claim for covered service denied through no fault of the medical provider Patient or insured party has liability to provider for debt, and potential cause of action against insurance provider
Claim denied because it was filed outside of the policy's time limits due to medical provider's negligence Insurer may be within its right to deny claim. Consult with a lawyer to learn if you have liability for debt, or cause of action against medical provider for failing to file claim in timely manner
Claim for covered service filed in a timely manner but rejected, then re-filed after deadline Insurance company required to pay the claim as the delay would have been due, at least in part, to its improper rejection of the initial claim
Medical provider tells you services were paid by insurance company, but later says they were not paid Medical provider may be liable for all or large portion of unpaid debt
Medical provider tells you covered services were not paid by insurance company Patient or insured party must file claim with insurance company
Medical provider tells patient its service is covered by patient's insurance, which later denies claim Ask medical provider to resubmit claim using proper or different coding. Consult lawyer if you believe medical provider's statement about your coverage had fraudulent intent

Regardless of the reason given by the insurance company for its denial, you have the right to appeal the decision if you feel that the claim should have been paid under the terms of your policy.

To read more about the insurance appeals process, and various other insurance related topics, visit the Web site to find a local medical advocate who may be able to help you.

Talk to a Bills.com about your options to free yourself from medical debt. The advice is free, and comes without obligation.

In situations where the medical provider sends you a bill in a timely manner and indicates the insurance company did not paid its claim, you are likely responsible for paying the bill and making sure any errors in the insurance claim are corrected. In situations like these, the medical provider’s attempts to collect on this debt and it placing the item on your credit reports are likely acceptable practices. You need to .

For more information about credit, credit reports, and credit scoring, visit the Bills.com page.

I wish you the best of luck in your efforts to resolve this debt.

I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

30 Comments

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  • 35x35
    Feb, 2013
    Kelly
    I have dental insurance. When we started treatment, the dentist receptionist laid out a plan for me of estimated costs. I expected it to be slightly different, but three services (billed at $215 each) were not paid because the insurance company doesn't allow two services to occur on one date. The office refuses to budge on me being responsible for the full amount, but I feel that if this is what the dental office receptionist does all day, she should call before services to pre authorize services. She did not do that and therefore, I don't feel I should be responsible for the bill.
    0 Votes

  • 35x35
    Apr, 2012
    Heather
    I beg to differ. When you go into a Dr's office or hospital the first info you give is your insurance information. Why would it be your responsibility to make sure that your insurance company was billed? That's why the facility you are visiting takes that info so they can bill, etc. Of course, I feel sorry for anyone whom may be having the same problems I'm having right now. With Dr's offices, hospitals and insurance companies.
    4 Votes

  • 35x35
    Apr, 2012
    Kyle
    We have a situation where the hospital failed to correctly file the claim to my insurance company from a visit in November. We have a zero balance bill from the date of the visit because at that point, our deductible had been met They now have found the error but we are no longer with that insurance company. Our previous company has denied the claim. Are we responsible for the bill?
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      Your question is starting to become a common one among Bills.com readers. This is a tough issue for consumers because the medical providers and insurance companies have tilted the table in their favor to the detriment of patients. As we replied to another reader several months ago, there are multiple sub-issues and three contracts in conflict here:
      • The contract between you and your insurance company
      • The contract between you and the medical provider
      • The contract between the insurance company and the medical provider

      When a claim is covered by the insurance, is a reasonable amount, and is submitted in a timely manner, then everyone is happy.

      However, when a medical provider makes mistakes in filing the claim with the insurance carrier and misses the insurance provider's deadline, guess who the medical provider looks to to pay the bill? It is unfair the patient, who pays for their insurance and expects the provider to file the claim competently, to pay for the provider's mistake.

      Let me put this argument another way: If the medical provider would have disclosed to you at the time you signed the contract, "It is likely we will not file this claim properly, resulting in your insurance carrier denying the claim," you probably would have taken your business elsewhere. But that is not what happened. You handed your insurance card to the billing person, who told you they accept your insurance, would handle the billing, and asked you to pay the co-pay. Implied in the transaction was a promise your maximum out-of-pocket cost would be the co-pay.

      My rant above is tempered by language many medical offices add to some contracts stating, in effect, if the insurance company does not honor their claim the patient agrees to pay for the services. I do not know how state appellate courts have viewed these clauses. My guess, note that word choice, state courts would view these clauses unfavorably in cases were it is clear the provider made mistakes when submitting the claims, then missed the carrier's deadline.

      My advice? Consult with a lawyer in your state who has consumer law or civil litigation experience to research the issues I raised here. Alternatively, open a negotiation with the medical office to resolve the debt for less than the full amount due.

      0 Votes

  • 35x35
    Feb, 2012
    Daisy
    My situation is a little different. I received a bill for my son's stay from the hospital back from when he was born. Which I thought was taken care of. They billed the wrong insurance and 11months later I am still getting a bill stating I own nothing and waiting an insurance response. They said it was my responsibly to give them updated info. I told them to my understanding they had it. If they were not getting payment why not contact me about it. They said that is where they are in the wrong, which this should be in collections by now and its not. They are going to try to get the right insurance to pay but they don't believe they will be able to since it past the six months of timely filing. What responsibilities do have of this bill? I would have given the information had I known they needed it. All the other bills from out hospital stay was paid over 10 months ago.
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      This is a confusing issue because there are multiple sub-issues involved. There are at least three contracts in conflict here:
      • The contract between you and your insurance company
      • The contract between you and the medical provider
      • The contract between the insurance company and the medical provider

      When a claim is covered by the insurance, is a reasonable amount, and is submitted in a timely manner, then everyone is happy.

      However, when a medical provider screws up and submits a claim after the deadline it contractually agreed to with the insurance carrier, the provider falls back on its contract with the patient. But, it is not fair that the provider suffers no harm from its screw-up. It is not the patient's fault the billing was mis-coded or late. And, the patient had a reasonable expectation to pay the co-pay and not the whole amount. Had the patient known in advance that the medical provider would not bill the insurance company properly and on time, the patient would have gone elsewhere.

      In my opinion, which is really just that and nothing more, it is not fair for the patient to suffer the harm caused by the medical provider's lack of billing competence. Again, in my opinion, patients in this position have an excellent argument for not paying the full amount due. Open a negotiation with the medical provider and use the arguments I discussed above.

      0 Votes

  • 35x35
    Feb, 2012
    Catherine
    I read a lot about "Balance Billing" but in most cases it is being done with out-of-network providers. What do I do when the insurance company is not holding up their portion of the bills and/or the in-network provider is balance billing me monies OVER the agreed upon deductible and co-pay amounts?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Consult with a lawyer about filing an action against the medical insurance company.
      0 Votes

  • 35x35
    Jan, 2012
    Alvin
    after the $10,000 of medical test charges, my doctor indicated that the initial x-ray was faulty. Am I liable for the medical charges
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      Yes, you have liability for the charges relating to the diagnosis. The real question is whether you have a cause of action for malpractice against the technician who shot the defective x-ray that lead to $10,000 in unnecessary medical tests. Consult with a lawyer who has medical malpractice experience in your state to learn if you have a case.
      0 Votes

  • 35x35
    Jun, 2011
    Frank
    I have a slightly different situation. I was laid-off from my job and as severance, my employer paid two additional months of health coverage. During those two months, I found new employment with new health insurance. I informed my former employer and no additional premium was paid past the 2 months. After the coverage expired, my pharmacy put through a claim to the former carrier and they paid it. Now the insurance company is pursuing a collection action against me. Am I responsible for the payment they made to the pharmacy outside of the term of the policy? The insurance carrier is in VA and I live in TX.
    0 Votes

    • 35x35
      Jun, 2011
      Bill
      Consult with a Texas lawyer who has experience in consumer law for a definitive answer. However, if the cost of the medication was less than a few hundred dollars, the cost of a lawyer's time to research the matter will probably exceed the price of the meds. Left unpaid, there is a possibility the insurance carrier may place a derogatory on your credit report. My advice? Pay the bill.
      0 Votes

    • 35x35
      Jun, 2011
      Frank
      Good advice. Thank you.
      0 Votes

  • 35x35
    Jan, 2011
    Diane
    I received a call in December 2010 from my doctor's office stating that they needed my updated insurnace information that I thought I had provided in December 2008. M
    0 Votes

    • 35x35
      Jan, 2011
      Bill
      If you are still a patient of that doctor, then you have every reason to provide him or her accurate medical insurance information.
      0 Votes

  • 35x35
    Sep, 2010
    Bill
    It is difficult for me to offer a precise observation because I do not know your state of residence. If you have been served with a summons and complaint, your best course of action is to seek counsel from an attorney in your state who has experience representing defendants in civil litigation.
    0 Votes

  • 35x35
    Sep, 2010
    Terry
    I have a situation where I received a hospital summary of services which basically just gave me reduction options as a private pay patient because they didn't have my insurance information. Thereafter, received subsequent bills from all the medical entities which I thought was the breakdown because I never received anything else ever from the hospital. Nearly a year later I start getting collection letters and called and informed them that I had medical insurance to advise the hospital and file claim. Also wrote a letter immediately after to collection agency requesting a breakdown of charges and restating that I had insurance. Needless to say, they never supplied me with the breakdown of charges nor filed insurance claim even after I had my insurance company fax them my ins. card and supplied the name and number of person to contact (my insurance representative). Now I am being sued. What is my recourse on this matter?
    0 Votes

  • 35x35
    Jul, 2010
    Robin
    In case of insurance claim, there is a huge chance of misguidance in any steps. So we should be very careful and aware in this process. Claim Star is a public insurance adjuster providing insurance policy review, claim management and settlement services. Licensed public adjuster offers profession renters, mold, smoke, fire, accident and water damage insurance claim and settlement.
    0 Votes

  • 35x35
    Mar, 2010
    Alex
    I just found out that an implant procedure completed in 2008 was not submitted to my insurance company. The dentist is a participating provider in my insurance company. I was told by my dentist that it was not covered by insurance. Blue Cross told me today that since it was not filed, and they were a participating provider that I should be reimbursed for my payment and that they should write it off. I contacted the billing department who got a big attitude with me and told me I needed to get all kinds of information from the insurance
    0 Votes

  • 35x35
    Mar, 2010
    Bill
    Depends on your state laws. See State Consumer Protection Laws and Exemptions to get started on researching this question for your state.
    0 Votes

  • 35x35
    Mar, 2010
    Penny
    We just received a bill from a medical provider more than a year after the services were rendered. This was the first bill we ever received. We didn't know this provider was even part of the procedure and they supposedly had the wrong address for our insurance, even though all other medical parties involved filed their bills in a timely manner and were reimbursed by our insurance company. Our insurance company is refusing to pay the bill because it is more than one year old. Do we have any right to refuse to pay a bill we didn't even know existed?
    1 Votes

    • 35x35
      Feb, 2011
      kb
      It depends on the state of residence. Texas law states that if a provider hasn't billed in 17 months the insurance carrier and patient are not liable for the bill.
      0 Votes

  • 35x35
    Jan, 2010
    roni
    If the services rendered are covered by the insurance company(carrier) without a deductible, co pay etc, she is not liable for the bills. She should find out the specifications of the insurance plan she has and point this out to the carrier, send that information to the provider and tell them to re-bill. Claims manager, PMR, Dental, Pediatrician.
    0 Votes

  • 35x35
    Oct, 2009
    Bill
    If there is any legal obligation to file a claim, it would be found in a contract between the insurance company and the insured. I cannot imagine that a medical service provider would have a legal obligation to file an insured patient's charges to the insurance company if the patient told them not to, but I suppose stranger terms and conditions could be written. I recommend you consult with the person responsible at your company who negotiates contracts with insurance carriers.
    0 Votes

  • 35x35
    Oct, 2009
    Sharron
    If a patient has medical insurance with a high deductible and does not want it filed are we legally obligated to file to the carrier.The patient just wanted to pay the charge out of their pocket and said to just forget about fooling with insurance.
    0 Votes

  • 35x35
    Jul, 2009
    Bill
    Yes, I recommend you make copies of the paperwork involved, including the back-and-forth between you and the insurance company, and the insurance company's notice that the bill would be paid. Please see Information on Credit Letter of Deletion for how to notify the credit reporting agencies of the error.
    0 Votes

    • 35x35
      May, 2011
      MIQUAN
      I have a similiar situation as Curt. My bill has not been paid yet but the doctor has resubmitted the claim with a different diagnosis code to my insurance company and it's pending resolution. Is there any way I can have the collection agency remove it from my credit report in the mean time? i'm trying to buy a house and that collection is my only tarnishment.
      0 Votes

    • 35x35
      May, 2011
      Bill
      Dispute the derogatory in question, and then ask for a rapid rescore.
      0 Votes

  • 35x35
    Jul, 2009
    Curt
    I have a very similar situation. I had a small medical bill that was not paid by my insurance company. I appealed to the insurance company because they did not pay the bill becuase the procedure was not pre-approved. Eventually the bill was paid by the insurance company. The insruance company paid the hospital. During the appeals process with the insurance company, the item was turned over to a collection agency and reported to the credit reporting companies (equifax, etc.) The item now shows up on my credit report as a paid collection. Can I get this item removed since the insurance company paid the bill (just late after appeals?)
    0 Votes

    • 35x35
      Feb, 2013
      Kelly
      You just have to go to each of the individual credit report Web sites and dispute the charge with your credit report. When you do that, TransUnion will give you a free credit report. If the creditor doesn't respond or they agree with you, the error will be removed.
      0 Votes