Managing Your Health Care

Medical Billing

Medical billing is often confusing. Hospitals and clinics generally bill directly to health insurers or HMOs, and certain billing codes are used to identify certain treatments or types of service. In addition, patients are sometimes asked to pay a portion of a bill through a co-pay or all of a bill if they don’t have health coverage or if the type of service is not covered under their particular health plan.

If you believe a health care provider is mistakenly attempting to collect charges, you may want to consider the following information.

• Keep all of your records. For instance, if you are being double-billed for something, it is important to have all past bills and communication with the provider on hand.
• Contact the provider and ask them about the charges you believe are incorrect.
• If the problem is not resolved, dispute the information in writing.

Sometimes a provider may use a collection agency or lawyer to collect bills that are not paid. If you would like to make a complaint about a provider involved in questionable billing practices, you may contact the Attorney General’s Office. The Attorney General’s Office publishes a free brochure called The Credit Handbook that discusses your collection law rights and how to dispute a debt. We also publish a flyer called Medical Billing Pointers. In addition, the Minnesota Department of Commerce regulates and accepts complaints concerning such activity, and can be reached by phone at (651) 539-1500.

Charging the Uninsured a Fairer Price and Changing Collection Practices

Although health plans, employers, and the government are able to negotiate steep discounts for health care charges, many hospitals and other providers have charged the uninsured their “sticker” or “list” prices, which are much higher. Most Minnesota hospitals signed agreements with the Minnesota Attorney General’s Office to offer uninsured patients a fairer price for hospital services and improve the debt collection practices that currently exist in the hospital industry.

The agreements will help those patients who do not have health insurance in the following way:

• The hospital will not charge a patient whose annual household income is less than $125,000 for any uninsured treatment in an amount greater than the amount the provider would be reimbursed for that service or treatment from the insurance company which provided that hospital with the most revenue for its services in the previous calendar year.

The agreements also establish standards that hospitals and certain clinics will follow when attempting to collect medical debt from patients.

• Prior to filing any lawsuit against a patient or referring any patient’s account to a debt collection agency or attorney, the hospitals and clinics will undertake due diligence to ensure that:
  1. The patient owes the debt,
  2. All insurance companies that may be responsible to pay the claim have been billed,
  3. The patient has been offered a payment plan if the patient cannot afford to pay the entire bill at once, and
  4. The patient has been offered any free or discounted care for which the patient may be eligible under the hospital’s charity care policy.
• Prior to garnishing any patient’s wages or bank account, the hospitals and clinics will undertake the same due diligence to ensure that impoverished patients are not improperly garnished. To ensure adequate judicial supervision over such actions, the hospitals and clinics will not pursue any garnishment without first obtaining a judgment against the patient.
• Hospitals and clinics will adopt a number of other specific debt collection reforms. For instance:
  1. They will develop a zero tolerance policy for abusive and harassing debt collection conduct;
  2. They will instruct their attorneys not to petition to have a debtor arrested as a result of a debt collection action;
  3. They will periodically review their contracts with outside debt collection agencies and attorneys to ensure they are acting in accordance with the law and the hospital’s mission;
  4. They will ensure that all lawsuits are promptly filed in court, that service of the lawsuit upon the patient is documented, and that no default judgment is obtained against the patient until the patient has been given a fair opportunity to respond.
• Hospitals and clinics will establish a streamlined process for patients to question or dispute bills, including a toll-free number they may call and an address to which they may write. Hospitals and clinics will promptly respond to patient inquiries. Collection notices will list the number for the Minnesota Attorney General’s Office for patients who need assistance.

As of the publication of this brochure, most Minnesota hospitals had signed agreements with the Minnesota Attorney General. If you are unsure about whether your hospital is covered by such an agreement, please contact us.

A Note about Collection Practices

The federal Fair Debt Collections Practices Act (FDCPA) establishes a standard procedure for “third-party” debt collection and provides consumers with certain protections. Within five days after the debt collector’s initial contact with you, the collector must send you a statement of the total amount owed to the creditor. In that written correspondence, the collector must also inform you what action you can take if you want to dispute owing the money. If you send a letter within thirty days disputing that you owe the money, the debt collector cannot make further collection efforts until you receive proof of the debt. The debt collector cannot collect for any debt that cannot be verified. The FDCPA also restricts debt collectors from trying to collect any debt in dispute.