Bills.com > Manage Debt > Deal with Debt > Debt Relief Q&A > How to Handle Medical Bills Debt
Question:
NOV 29, 2012

How to Handle Medical Bills Debt

I don't know how to get out of debt we have so many medical bills... HELP?

Read full question
Share on Facebook 123 Comments
Medical Office Insurance Card | Medical Debt
Bill's Answer: Answered by Mark Cappel

Thank you for your question about medical bill debt. Medical bills, and uncovered insurance costs as a result of hospital or medical procedures, can be particularly difficult to manage since they are often billed as an invoice. In other words, 100% of the payment is due upon receipt of the bill. This is very different from other large-expense items like a home, automobile, or even credit card debts where a lender finances you and offers a repayment period with low monthly payments.

You have four options for handling medical debt you cannot afford to pay immediately:

  • Apply for financial assistance
  • Negotiate a settlement
  • Obtain a debt consolidation loan
  • File bankruptcy

Let's look at each of these options.

Medical Financial Assistance

If your medical debt is held by a non-profit hospital, it may have in its charter an accommodation strategy for consumers who cannot afford to pay due to hardship, and many times will be willing to work with you. For-profit hospitals may have a financial counselor/financial assistance office where you can meet with someone face-to-face or over the telephone to discuss your financial situation. You will be asked to disclose your immediate family's financial information when you apply for financial assistance.

Help may also be available though church, civic, social, and fraternal groups in the community, as well as Salvation Army, Catholic Social Services, the United Way, Jewish Social Services, and others that can be found in the yellow pages. Your situation may seem dire, but you are not alone in facing these hurdles, so reach out these and other reputable organizations.

Quick Tip No. 1: The Bills.com Debt Coach offers non-nonsense information about your debt relief options, and will give you the pros, cons, and costs for each.

Negotiate a Settlement

If financial assistance is not option for you, then negotiate a reduction in the payment or work out a payment plan with the provider. Follow the link just mentioned to learn how to negotiate medical debts. Alternatively, hire a debt relief provider to develop a debt consolidation payment plan you can afford.

Consolidation Loan

There are several different types of consolidation loans, but the one that will best suit your situation depends primarily on whether you own a home and your credit history. One option is to consider a cash-out mortgage refinance to consolidate debt. A Bills.com partner can give you a no-cost mortgage refinance quote.

If you do not own a home or other property to offer as collateral for a secured debt consolidation loan, there are several other options you should consider. You could also look into an unsecured personal loan to consolidate your debts. However, your ability to qualify for either a credit card or a personal loan that will actually save you money greatly depends on your credit score. If your credit history is less than perfect, you may have difficulty finding a lender willing to extend you credit, and if you do find a loan, you should expect to pay a premium in interest.

A possible loan source you may want to explore is a peer-to-peer loan. Prosper.com and Lending Club offer peer-to-peer loans. Both Web sites put private lenders in contact with private borrowers. A private lender may be more willing extend you a loan than a traditional bank. If you are unable to find a consolidation loan that fits your needs, you must consider an alternative.

Quick Tip No. 2: Health CPA is a service that audits your insurance and medical bills to make sure you are not overcharged.

Bankruptcy

Two forms of bankruptcy are available to consumers — chapter 7 and chapter 13. Which chapter a consumer qualify for depends on the circumstances of each. A chapter 7 bankruptcy wipes out all qualifying debts in very short period of time. A chapter 13 bankruptcy, by contrast, creates a payment plan that lasts up to 5 years with payments a bankruptcy trustee determines are affordable to the consumer. At the end of the 5-year period, the remaining debt balances may be canceled by the court. See the Bills.com bankruptcy page to learn more about this option.

Quick Tip No. 3: To learn more about the insurance appeals process visit the Medical Billing Advocates of America Web site to find a local medical advocate who may be able to help you.

If you filed for bankruptcy before, whether you can file again today depends on how much time passed since your last filing. Under the bankruptcy law changes enacted in 2005, you can file Chapter 7 bankruptcy once every 8 years, and you must wait 4 years after filing a Chapter 7 before you can file bankruptcy under Chapter 13.

Make a Budget

You mentioned you filed bankruptcy previously, and now find yourself in debt again. The only way you can prevent yourself from falling into debt is by creating a household budget and sticking to it. Bills.com created a starter budget you can use as-is or modify to your needs. Follow the link just mentioned to get yourself back on track.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

Rate this article
Not helpful
Awesome
Share on Twitter Share on Facebook

Comments (123)


Stephani B.
El Paso, TX  |  November 10, 2011
Hello. I am an Army Wife station in El Paso, Tx. I moved here Dec 2008 and, apparently, went to the ER Feb 17 2009. I just found out yesterday that this dr sent me to collections on a bill I never knew about. I have tricare and they pay for everything. After making a lot of phone calls, I find out he waited 2.5yrs before sending in a claim to my insurance company. The claim stated he sent it in July 2011 and August 2011. Tricare denied it as the "filing time limit" has passed. During this whole time, up until yesterday (11/9/2011), I did not receive a single bill, notification, or statement of any kind stating I had a bill due. My insurance company never contacted me stating a claim sent in was denied. Now I have NCO FIN contacting me about this bill. What can I do in this matter? Can the really send me to a collection agency without ever informing me of this bill and not ever giving me the option to attempt to pay it? Thank you for help, Bill!
Bills.com
November 14, 2011
Read the following Bills.com resources make yourself a more informed consumer:

It is patently unfair and unreasonable for a medical service provider to bill a patient for services long after the patient's medical insurance will accept the invoice. It shows the medical service provider is not in control of its finances, but I digress. It may also be contrary to the contract the service provider made when it agreed to accept the insurance.

My advice? Validate the debt. A debt that cannot be validated need not be paid.

Avatar
Julie F.
Barboursville, VA  |  February 01, 2012
If the provider was contracted with Tricare and they did not submit the claim within the filing limit, they CANNOT transfer the cost to you. They have to write it off. If they are NOT contracted with Tricare then they do not have to. Also, the provider would have to prove that they sent it to Tricare AND they must prove that Tricare received the claim.
Matt A.
Charleston, WV  |  October 28, 2011
In January of 2007 an out-of-network doctor performed the delivery of my son. Prior to labor we had an arrangement with our in-network doctor which would have our covered our expenses. At the last minute without a verbal or written the out-of-network doctor appears to deliver my son. After the insurance refused to pay the balance owed they sent us a bill in May of 2007. After several conversations I informed the physician's office that I was unable to pay the full amount, which mysteriously was in my wife's name instead of mine, the insurance policy holder, but they refused to negotiate on a reasonable payment plan due to the low balance (less than $1000.) Today, October 2011, I find out the bill has been turned over to collections after 4 years of us never receiving a statement from the doctor. I have not been contacted by the collection agency as of yet either by phone or by mail (I found out about the debt via a credit report I requested for my wife) and according to West Virginia state law (WV being both the state we live and the state where the procedure occurred) the statute of limitations for legal action in such a case is 5 years from the date of service. Should I, if contacted, go through the process of requesting validity and, if the validity is not sufficient, see if the SOL runs out? After one year of no bills I honestly thought the debt had been written off considering we applied for their charity program.
Bills.com
October 28, 2011
You seem surprised someone other than your doctor performed the procedure. It is a shame you did not consult with a lawyer immediately regarding this issue because a doctor (or other person) who performs a procedure without the patient's consent is guilty of battery.

By all means validate the debt.
Diana R.
New Castle Hundre, DE  |  October 14, 2011
Hello I have the same problem I own $2,518.60 to the hospital of Delaware on ultrasounds since last October and today I got a letter from a Law Office saying that they have the authorization to suit me and I don't know what to do.. I have 3 kind and unemployed I receive food stamps and tanfs (welfare). My husband was layoff for over 9 months he recently went back to work last week and the house utilities are a lot Plus rent I can't afford to pay and I have 30 days to respond to these letter I also have to say that I'm not a us citizen and it makes harder on me.. Pls any advice what would happen if I don't answer within 30 days?? I'm freaking out :(
Bills.com
October 14, 2011
Learning your rights and liabilities will ease your fears of the unknown. Several reading assignments for you: Start with Collection Laws & Exemptions by State to learn what exemptions may apply to you in your state of residence. Second, read Served Summons & Complaint to learn how the collections process works in general. Next, read Collections Agencies, Collections Laws and Your State's Statute of Limitations. Finally, you mentioned you are a foreign national. Federal and state debt laws apply to residents and not citizens. In other words, it does not matter if you are a citizen of the US or Mars, a state's debt laws apply equally to all residents in that state.
Mark G.
Hurricane, WV  |  September 27, 2011
My 23 year old uninsured, soon to be employed, full-time-student nephew that lives in my basement because his mother has cancer and grandfather needs and operation has paid $100 per month for two years on his hospital bill and has $3000 to go. Whether or not there was an official payment plan, I do not know, but the have accepted his payment in all cases up until now. They have moved his account to a credit agency that is demanding full immediate payment of the remaining $3000 within one day or they will put it on his credit rating. The hospital has stated that they are not interested in negotiating another payment plan. My poor nephew is likely going to borrow the full amount on a credit card. The collection company suggested that his only other option was to apply for welfare, and with that in place, they would not demand full payment. Does he have any other options? Can they nullify/change his "repayment plan" after accepting his money for two years? The entire debt would have been paid off in another 2.5 years.
Bills.com
September 27, 2011
The legal jargon you hint at is in the estoppel branch of civil law called the doctrine of acquiescence. This is where a party, without malice, infringes on a right while the injured party knowingly stands by without raising an objection to the infringement of their rights. This is also called acquiescence by silence.

Consult with a lawyer in your state who has consumer law or civil litigation experience to learn if the doctrine of acquiescence has been a successful litigation tactic.
Sara L.
Garden Grove, CA  |  September 21, 2011
Back in 2009, I went to the emergency room because of a concussion. The bill came out to approximately $5,000. My insurance covered half and I was left with about $2,500. At the time, I was only 19, unemployed, and living on my own. I wasn't able to afford to pay my share of the bill so it went to collections. In 2010, I ended up in the hospital due to a viral infection and the bill came out to be around $2,000. That bill also went to collections as I am still not able to afford it. I am now left with about $5,000 of medical bills that have been sent to collections. My question is: If I leave it alone, will this affect me in about 10 years from now? Also, if I pay it off in 5 years, does it make a difference? I still cannot afford to pay off my bills but I know I'll be able to once of these days after I am able to get a good job but I just want to know what I should do at this point...
Bills.com
September 21, 2011
There is a statute of limitations on debt. The length of the statute depends on your state of residence.

You don't say if anyone is trying to collect on this debt or not. If not, you can choose to wait things out, hoping that the SOL passes, eliminating your obligation to pay. Even if the SOL passes, the debt can continue to affect you, by appearing on your credit report for 7½ years after the first delinquency.

Whenever you have the means to start paying on the debt, you can choose to contact the creditor to attempt to work out a payment plan. If no one is contacting you, keep in mind that if you approach a creditor in good faith, attempting to reach a payment you can afford, it can lead to more aggressive collections and threats of legal action. That may not happen, but is a risk to be aware of.
Alyssa R.
Little Canada, MN  |  September 11, 2011
I am a young full time working person who is not considered low income. In the past two years I have ended up in the hospital. In 2009 for gallbladder removal which cost $12,000 for which I was uninsured. This particular situation worked out fairly well bc my husband lost his job so we qualified for assistance which reduced my bill to $3000. Then again in 2010 I ended up in the hospital for kidney stones costing $6,200, although this time i thought i was ok since I had medical insurance through my husband and an additional plan through my work. No such luck. My husbands insurance covered $300 and my additional plan had a $9000 deductible. I have applied for assistance but was rejected so now they are saying I need to pay the total within 18 months which would be about $350 in addition to the other bill i am still paying on. I am curious how real that 18 month limit truly is. If I continue to pay a monthly amount that I deem is affordable but that will not result in the total amount being paid in 18 months can the hospital send my bill to collection? If the 18 month limit is true what are the options available to a person like me bc I can not afford those two monthly payments?
Bills.com
September 12, 2011
There is nothing magical about 18 months. This is a hospital policy, perhaps based on experience with other patients. Regardless, if you cannot pay the entire amount in 18 months, you are free to negotiate a longer period. However, the hospital is free to reject your offer and sell your collection account to a collection agent.
Beth W.
Maple Valley, WA  |  September 02, 2011
I didn't read all replies, so sorry if redundant. I had an emergency appendectomy last year. No insurance, out of work, single mom..the bills came up to just under 90 thousand dollars. I applied to the hospitals billing department for a bill reduction, and after 1 rejection and appeal, I found out today they reduced it by 100 percent! So before you go bankrupt, apply to the charity that almost all hospitals have. My mom was the one who told me most hospitals have charity. I still owe on bills from outsourced things, like labs, but they hopefully will be reduced as well.
Chris O.
San Jose, CA  |  September 02, 2011
Thanks for this very useful discussion! I am homeless and have no resources; I am not a US citizen so I don't qualify for benefits, though I do get food stamps worth $17 a month('Calfresh'). I qualified on grounds of a mental disability and spousal cruelty resulting in divorce, last year. But I do not get SSI or any other benefits. Recently I had cause to be in hospital several times in a few days, one visit being to the county hospital which I believed provided free care. On the other occasion, a paramedic on the scene told me I would be placing myself at a life-threatening risk if I did not go to the nearest hospital by ambulance straight away, whether they charged me or not. So the bills have now appeared, around $6000 worth of them. It's known I am indigent through no fault of my own and that I have no way to pay. I am already bankrupt. I can't be alone in this situation, what's the best way to approach this? I am 60 years old and in poor health, and have no prospect of employment. By the way, it's interesting to note that a 5-minute, uneventful one mile trip to hospital in an ambulance costs two-and-a-half times the price of an MRI scan and evaluation. How companies can charge $1200 for such a trip is beyond justification.
Bills.com
September 02, 2011
There is not much you can do, if you have no means to offer a payment plan or settlement. If you have no income or bank accounts, there is not much a creditor can do to collect. It is not illegal to owe money; you can't be sent to jail for your medical debt.

I can't explain nor justify why your costs were so high.
Dori H.
Wildomar, CA  |  July 16, 2011
Hi, I'm hoping someone can give me some direction to go in. My daughter's 20yr old friendwho she grew up with (who is homeless) came to stay with us for several weeks (still here). He was VERY sick with a kidney infection. I took him to my family doctor at an urgent care. He has no medical insurance so I told my family doc to use my credit on my account. My doc supossively offers a cash discount. Today, I received 3 bills for this young man in MY name as the one who owes on these bills? First bill was from family doc who charged me an additional $67 on top of $432 (no cash discount listed either); the 2nd & 3rd were from a Lab. Both these bills total $233. Now when we filled out the papers at docs office, I told the doc I would take care of the bill for the office visit only & confirmed that doc would give me a discount for paying cash. now I'm getting Lab bills for this young man as well. What can do to get my self outta this mess when all I was trying to do is help? Currently I'm writing to the lab company & doc's office asking them for a discount on these bills. Any help would be greatly appreciated!
Bills.com
July 17, 2011
You answered your own question. You promised the doctor you would guarantee payment of the patient's bill, and in reliance of that promise, the doctor performed services necessary to diagnose and treat the patient. In light of your promise, it is fair and reasonable for the doctor to bill you for his or her office's services plus the lab work. In legal terms, you promised to be the patient's guarantor. If the office has a policy of offering a cash discount for its services, then you are right to insist on that discount.

In the future, bring any indigent person requiring medical care to the local hospital's emergency room, and do not promise to pay for that person's care.
Avatar
Dori H.
Wildomar, CA  |  July 17, 2011
Thanks for your response. I guess I should have been a little more clear with my question. I said I would pay for the doctor's services, but the doctor ordered more lab work and sent it out to a company. I didn't agree to be held accountable for those extra lab charges. The doctor provided the lab company with my info and now they are billing me for these extra charges. I'm I liable for the extra lab charges too?
Bills.com
July 18, 2011
Given the size of the bills, it does not make financial sense to pay for an attorney's assistance.

I understand you only wanted to help and you don't want to pay for the lab services. However, you asked the doctor to care for the patient and he or she ordered tests she or he deemed necessary. I think the simplest course is to pay the bill and chalk it up as a lesson learned.
Ann V.
New Braunfels, TX  |  June 27, 2011
My father was a nursing home resident. I was the guarantor for his nursing home payment. He was a hospice patient. The nursing home sent him to the hospital without prior approval from hospice. Medicare refused to pay the bills because my father was enrolled in a hospice. Six weeks later, my father died. I am receiving bills from the doctors and hospital related to that hospital stay. Am I responsible for that debt? My father died intestate.
Bills.com
June 28, 2011
Speak with an attorney to learn if you are financially responsible for the bills. A key question is whether the nursing home had authority to send him to the hospital or if it needed the approval of the hospice to do so.
Waiting for comments to load Loading more comments
Thanks for your feedback!
 
Articles Ask Bill

Tool Box   Easy to use resources to help you find solutions to your money questions

Thank you for subscribing!