Bill-Collector Confidential

by Steve Katz and George Trinkaus

Doctors, dentists, hospitals, HMO's

Today's cold, corporate, profit-centered medical-dental world is unlikely to grant you much credit on its own. If you show up without insurance, you'll be referred to your credit card. If you demur, you'll likely be asked to bring along full payment in cash.  But recently author George (uninsured, no credit cards) ripped his thumb on a power saw and took himself to the nearest hospital emergency room, which sent him home with a bill for $750, or $150 per stitch, a call to debtsmanship if there ever was one.
   Medical credit, when granted, often covers situations like George's, and it also covers the many insured patients who owe balances that insurance or HMO did not cover.
    The hospital, HMO, or doctor's office will have some internal collection capability, not too heavy-handed. But there is enough medical debt to support an outside cottage industry of predatory collection agencies that specialize in your medical bills. These agencies are quick to throw the record of your medical debt into your credit file, causing a huge drop in your sacred credit score, and this can happen even if the debt is trivial.
    Your delinquent dentist bill may be sent from agency to agency, and each will report the same debt to your credit file, this without telling you or even making an attempt to collect. It's a punitive and draconian strategy of intimidation that, if you have bought into the credit world, is effective in forcing you to pay, for it invites your other creditors to invoke universal default, thus poisoning your file and raising your cost of credit for at least six months.

Always challenge the bill.

Author George's $750 emergency-room bill never made it to the collection agency. Instead, upon receiving the first late notice from the hospital, he challenged hospital collection as to the accuracy of the bill, expressing his surprise at the amount. George then asked for a complete documentation of all charges. The original bill came without any documentation of the stupendous charge for the service. The paper that came back to George from the hospital itemized the charges, but in some obscure internal code. George demanded a translation, and he had to insist. Finally the hospital provided a statement in which the numerical codes were translated into an abbreviated medical English.
    The precise charges the hospital admitted to were either wildly exorbitant or totally irrelevant to the procedures done. Calmly pointing out these discrepancies to the collector item by item, George easily built a case against the hospital's honesty that would have been embarrassing if made public. George said he wouldn't endorse such a dubious bill by paying a cent on it and that he wouldn't mind being sued, that he would in fact enjoy going to court, so insupportable was the hospital's case. This challenge got him passed up the ladder, ultimately to the hospital's ombudsman who admitted to “mistakes.” Sound familiar? The System is never wrong. It admits only to “mistakes.”
    How systematic is this hospital practice of absurdly inflating charges and concealing the theft behind inscrutable codes? Are you being systematically ripped off? Ralph Nader says that such billing fraud is not an exception but the rule for the industry. Nader says that at least ten percent of income is derived from billing fraud: $222 billion. Healthcare businesses even hire specialist consultants to custom-design elaborate accounting systems to rip off unsuspecting patients. It has become routine for healthcare accountants to pad your bill by hiding false charges under obscure codes, by switching codes up to more expensive categories, and by creating phantom entries.

Health-care insurance or debtsmanship?

To the debtsman, every healthcare bill is suspect and is regarded as a creative challenge. Demand an invoice that itemizes all charges. Demand a translation of every code. Demand an explanation for every entry. Challenge any charge that seems exorbitant or false. Refuse payment. Challenge this industry which has lost all ethics. You may get a hefty reduction. Debtsman George never paid that hospital a cent. George advises you not to waste your money on some capricious rip-off health-insurance policy. Use debtsmanship.
    Author Steve, who does have insurance, has noted that doctors like to “forget” the provision in their contract that “writes down” the bill to equal one's co-pay plus the insurance company’s payment. (To make up for this write-down is why George was charged $150 per stitch.)
    Steve's strategy is this: When he hears from the collection agent, he says, “There may be a medical malpractice suit against the doctor. Does the collection agency want to get involved?” Alarmed, the agency will forget about that account and move on to the next victim. Steve had occasion to use this strategy when a doctor failed to do the insurance write-down, resulting in Steve having to contend with a collection agency over a $40 discrepancy. This collector just wouldn’t back down, so Steve applied the screws and invoked Fair Debt Collection Practices Act (FDCPA), which ultimately resulted in the collector canceling the debt and awarding Steve $1000 for the insult.

from Bill-Collector Confidential

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