Medical debt is damaging the credit of around 43 million people, according to the latest figures available.
You would expect damaged credit from medical bills to be a problem for the uninsured, but the untold story here is that people with insurance get their credit trashed both because of billing mix-ups and high debt-to-income ratios.
And much of that debt is money that people don't legitimately owe. In fact, roughly 80% of patient medical bills contain errors, according to a report from Money magazine and other industry estimates.
So that means you can assume the bill will almost always be wrong, and it won't be in your favor.
It's hard to blame hospitals and medical centers for the mistakes because they are so difficult to run -- but that doesn't mean you should just roll over and pay the bill!
Take back control of your medical bills
Whenever you have a hospital or doctor visit, you need to document everything that goes on while you are there.
If you need some help, just ask a friend or relative to help you keep track and write down every medication you are taking and every procedure you have. Then when the time comes to get the bill, ask for it to be itemized. You can then compare everything you have written down to everything on the list. Unfortunately, it's up to you to stay on top of it -- which is why it's always a good idea to have somewhere there with you when necessary.
How medical bill advocates can help
You can also hire claims assistance professionals or medical billing advocates who will look over your bills and vet them for errors. They're available in more than half of all states in the country. Visit Claims.org or BillAdvocates.com to locate one near you and expect to pay between $30 and $50 per hour for their services. Anyone who is uninsured and paying retail for expensive medical services should go this route.
These advocates can significantly reduce what you owe by identifying errors, fraudulent charges and other ways the hospital may have taken advantage of you financially.
3 ways you can attack bad medical debt on your own
If bad medical debt is harming you, consider the following options...
1. Know what bad marks are in your credit file
You can't talk about medical debt without first knowing what's in your credit report. You can learn what's contained in your file for free by going to AnnualCreditReport.com.
Errors on credit reports are common. Maybe your credit file is "married" to somebody else's who has a same or similar name, or maybe there's a false lien supposedly filed against you. It could be anything; those are just two of the most common examples.
When there's something wrong on your credit file, you need to file a dispute with both the credit issuer and the credit bureau simultaneously. Send all of your documents by certified mail, return receipt requested, which means you have to use the manual form, not the automated system.
If the problem is not fixed, re-dispute it with the bureau. If that fails, you must sue both the credit issuer and the credit bureau in small claims court. Most of the time, both parties will cave before the court date and remove the black mark from your report.
Should all of this fail to get the job done, there's a new cop on the beat overseeing the credit reporting industry. The Consumer Financial Protection Bureau is now accepting complaints if you've been put on ignore by Experian, Equifax and TransUnion over errors on your credit report. Make a visit to ConsumerFinance.gov/Complaint your last resort; you want to give the bureaus a chance to mend their ways first!
2. Find the right buttons to push
Clark recently heard from a caller to his show who was involved in a fee dispute with a dentist over the cost of services that had been rendered. She resolved her beef by appealing to the state insurance department.
There's a teaching lesson here for everyone. You've got to push as many buttons as you can until you find the right one. The insurance commissioner's office in her state had no real jurisdiction over the dentist, but they use moral suasion to make things right for this consumer.
If you have a fee dispute with a medical provider, you have options. If it's a dentist, the local chapter of the American Dental Association (ADA) usually will have some form of panel where you can file a fee dispute just as the caller did with state insurance department. For a doctor, check with the local affiliate of the American Medical Association for the same procedure. Visit ADA.org and AMA-ASSN.org, respectively, for more info.
3. Consider small claims court if all else fails
If challenging an error on your credit report doesn't work, and you can't find the right buttons to push at an industry level, you might have to consider small claims court. File a suit in the county where the adversary lives or does business. Call the clerk of court in the county where you'll be filing to learn that court's procedure. You'll pay a filing fee of generally less than $100 that is recoverable if you win.
Small claims court is really best used as a tactic to call the errant party's bluff and get them to remove the bad mark on your credit. That's what you really want. But if you don't get your desired result once the medical provider is served notice of the suit, you want to show up well organized with strong documentation that shows how you've been harmed, why the person or company is responsible and how much you're seeking in damages.
Read more: 12 ways to reduce your medical costs