Medical Bills Affect Credit and Cause Bankruptcy: There are Solutions

The debt from medical bills are like a black hole on a credit report. Tracking the origin of the medical bills is the first step to navigating the debt and determining if and how the bills can be reduced. Medical providers are less likely to report the debt to a credit reporting agency and are more likely to contract it out to a debt collection agency. Not knowing how to strike a deal for medical debt can lead to bankruptcy. Let’s learn how to navigate medical bills and save.

Instead of Sacrificing Assets Control Medical Spending

Even with health insurance, people are facing medical debt from deductibles and denied claims. Once the origin of the medical debt on a credit report is determined it is possible to negotiate the debt. Gather any medical insurance explanation of benefits (EOB) mailings, contact the insurance carrier to get copies.

With the EOB it is possible to track where medical care was received.

Once the medical provider is known call them and get a copy of the bill. Once the bill is on hand then it is possible to go through it for any common errors. Make sure that the services on the bills are not duplicated.

Bills that do not itemize services can be denied by insurance carriers. If the description of the billing item is vague or if the CPT code does not match the description then a claim will be charged to the insured. Call the medical provider and have them itemize the bill before resubmitting it to the insurance carrier. CPT codes can be looked up on the American Medical Associations website.

Remember that medical bills are negotiable. Hospitals can charge exorbitant fees for supplies like gowns, gloves and toiletries. Just because they try to charge an unreasonable fee for a toothbrush or hospital gown it does not mean the insured should pay it.

If a fee is not customary and reasonable it will not be covered by the insurance carrier. After checking the bill against the EOB and the insurance policy, label any inconsistencies. If there are errors make an appointment with a billing representative to negotiate. Be prepared with comparable prices for the services that are being contested if one of the concerns is an unreasonable fee. Have notes on any inaccuracies or inconsistencies in the documents.  During the appointment go over the errors and discuss fair pricing. If the balance is still not affordable discuss what is affordable and perhaps the medical provider will strike a deal.

After having an appointment with the billing representative the claim should be resubmitted to the insurance company. If any services are not covered and they should have been, the decision can be appealed as outlined in the insurance policy. These policies are required to be plain and clear, however, if all of this seems like too much to handle, consider hiring a medical billing advocate to help escape the web of medical debt.


When you know you don’t owe that much, but you don’t have the time to deal, this is what you do. Click here to read my article in Working Mother.


Check out more tips in my top selling health law book on amazon.

Michael Kram MD, author, Zebra: It’s not All Black and White in the Physical or Spiritual Worlds, stated “Advocacy firms such as MedWise Insurance are essential in this day and age.”

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