Law And Acts To Follow While Considering Medical Debt Relief


The unexpected yet urgent nature of medical issues and requirement of treatment results in difficulty in meeting the bills and thereby puts an individual into medical debt. Adding to the problem is the already existing debts that they may have in the form of credit card debts, personal loans, student loans, auto loans and mortgages.

A lot of people face the wrath of medical debts and it is until recently that the governments and institutions woke up with a very late realization of the fact that almost all of them are subject to unfair practices.

  • As a result they are being unable to pay off their debts and therefore are unjustly punished with a negative mark in their credit reports due to these unpaid medical debts.
  • This in turn reduces their ability to borrow money in the future adding on to their stress and making their financial condition even worse. The more depressing fact is that these medical debts do not precisely reflect the true credit worthiness of an individual.
  • According to a study conducted by the CFPB or Consumer Finance Protection Bureau it is revealed that almost one in every five credit reports cite medical debts as the reason that distorts the credit position of a consumer.

As a result of these facts and findings, it was finally in 2017 the government passed a specific law.

  • According to this law it is required by all credit reporting agencies to permit a grace period of 180 days before they can list a medical debt on a particular credit report. That means the law gives the doctors and hospitals as well as the insurance companies enough time to figure out any discrepancies in the billing. They can also find out who is actually going to foot the bill within this time.
  • More importantly, it gives a lot of relief for the patients. They can now have a buffer period in which they can dispute specific charges before it is put into their credit reports.
  • Apart from that, the law also allows removal of any reports from the credit report that has been paid later by the insurance companies.

All this provisions has enabled the consumers to minimize the impact of medical debt in their credit report. The Fair Isaac Corporation newest scoring model FICO Score 9 has also helped them in this process. As a consequence of the law you will now not be punished as severely as before for medical debts that are in collections or paid later as you would for any traditional debt.

According to experts more legislation is expected as several others have been proposed so that the punitive damage caused by the paid medical debts can be erased. These laws will also help the consumers to eliminate any credit penalties that are usually related to healthcare. However, these bills are still pending as it has yet to make it out of Congress.

Check for accuracy

Most people experiencing the wrath of medical bills and debts often choose two popular options to deal with their debts. One is debt settlement and the other is debt consolidation. Assuming that you too want to follow their footsteps and also assuming that you have checked out both debt consolidation as well as debt settlement reviews to be knowledgeable about the process and consequences, here are a few things you can do before you start the process according to the law.

  • Check for the accuracy in you medical bills and contest any disputes there may be with the doctor who treated you or with the hospital’s billing department.
  • After you are satisfied with the bill you must check it with your insurance company as well to make sure that they were applied correctly with the revised and corrected bills. It is an important process as this will ensure that the insurance company pays for everything that they are supposed to according to your policy coverage.

It is only when you follow these two processes properly you will know about the exact amount remaining that you must pay from your own pocket or other sources.

If you check your medical bill properly, you will find a few common inaccuracies such as:

  • Double billing for something you have already paid
  • Services not rendered is a fraudulent charge often made by dishonest health providers to inflate bills that they think will be paid by insurance or the government anyway and
  • Coding errors and typos are also common while submitting claims to the insurance companies that may bill you accidentally for a more expensive treatment process or medication.

Remember, mistakes are very common and especially in a medical bill there can be a lot of ‘purposeful mistakes’ made and left there simply to inflate the bill and extract the maximum from you or the insurance company. Since healthcare as it is very expensive, make sure that you do not pay a large amount for a specific treatment or treatments that you did not receive.

Other aspects of the law

The law also has a few other impacts such as on the free health care providers and non-profits. There are different programs launched by the government apart from Medicaid that you nay avail so that you get a healthcare for free or at a reduced cost.

To find such programs the best place to start is the Health Resources and Services Administration. The HRSA is an organization run by the federal government that follows the mission to “achieve health equity through access to quality services.” You can visit their official website to look at their services and search for an affordable and easy to access health center in your area from their database to avail such a program.

However, no matter whichever program you choose you are requested to read the reviews as each will have different requirements and consequences. Being wise and knowledgeable will help you to manage your debt in a more proficient and effective manner. Therefore, make sure you spend some time on the internet before you finalize on a program.

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