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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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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  • KM
    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

  • HS
    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

  • KC
    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

    • BA
      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

  • DB
    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

    • BA
      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

  • CR
    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

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