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Consumer Agency Weighs Ban on Medical Debts in Credit Reports


“Don’t panic,” said Caitlin Donovan, the spokeswoman for the Patient Advocate Foundation. Begin by checking if the bill is accurate. This usually means comparing it with an “explanation of benefits” from your health insurer (if you have coverage) or contacting the provider for clarification. The so-called EOB usually states that it is “not a bill” so people sometimes ignore them. “Don’t,” Ms. Donovan said. The benefit statement is proof that your insurer has been billed and gives you information to help challenge questionable charges. In some cases, Ms. Donovan said, hospitals may mistakenly send bills directly to the patient rather than billing the insurer first.

If the bill is accurate, call the provider’s billing office and ask about monthly payment plans. Also, many hospitals have programs to help low-income people pay medical bills — but they may not mention them unless you inquire. “You have to ask,” Ms. Donovan said.

It’s also worth asking if the provider will reduce the amount of the bill in exchange for a lump-sum payment, said Chi Chi Wu, an attorney with the National Consumer Law Center. She recalled that she once called a provider to ask about a bill and, without any prompting, the billing representative offered a 25 percent discount if she paid in full immediately.

Try to exhaust other options and negotiate the lowest bill possible before putting the balance on a credit card, consumer advocates say. Paying medical bills with a credit card and then failing to pay may be worse for your credit than not paying the bill in the first place. That’s because the latest versions of both the FICO and VantageScore credit scores ignore reports of medical debt that has already been paid and limit the effect of medical debt that remains unpaid, Ms. Wu said. Be aware, however, that not all lenders use the updated credit scoring systems, she said. Mortgage lenders, in particular, may use older versions that don’t treat medical debt differently.

And, Ms. Wu said, some credit score users, like employers and landlords, may look at your full credit report, not just your score. So medical debt can still cause problems, even if it’s not reflected in your credit score.

A law called the No Surprises Act, which took effect in January, put in place new consumer protections against surprise medical bills. Surprise bills may come when patients inadvertently get care from emergency rooms and doctors outside of their insurance plan’s network. (This happens in about one in five emergency room visits, according to an analysis by the Kaiser Family Foundation and the Peterson Center on Healthcare.) The federal government estimates that the law will apply to about 10 million out-of-network surprise bills a year.

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