The last thing anyone wants to deal with after a serious illness or injury is a mountain of debt and repeated calls from bill collectors. Yet that's the scenario in which many patients find themselves.
Patients can avoid some of those headaches and minimize the risk they'll need to file for bankruptcy protection. To do that, they must discuss costs and payment options early on with their hospital or medical provider, and be sure that they have tapped into any available discounts and financial assistance.
But new standards, coming from government and the hospital and bill collection industries, should make resolving disputes and paying bills easier and fairer for patients, experts say. That's really needed as consumers face growing medical bills.
Health care spending jumped from an average $2,854 per person in 1990 to $8,915 per person in 2012, according to the Centers for Medicare and Medicaid Services; although the rate of increase slowed beginning in 2008 due to the Great Recession. Now employers are aggressively shifting health costs onto employees, through higher copayments and monthly premiums, bigger deductibles and reduced co-insurance, which sticks patients with a bigger chunk of major medical bills -- sometimes tens of thousands of dollars. For uninsured patients, it's even worse.
The number of working-age Americans who said they were having trouble paying medical bills or were paying them off over time hit 75 million, or 41 percent, in 2012, according to surveys by The Commonwealth Fund, a foundation working to make health care better and more accessible. Meanwhile, medical debt is a top cause of personal bankruptcies.
"People are generally shocked when they find out what things cost. Try to negotiate (with the care provider). Talk to them up front," says Mark Rukavina, founder of Boston-based Community Health Advisors. It works with hospitals around the country to develop financial assistance, billing and collection policies that meet new regulations.
New industry guidelines for resolving disputes about medical debt, announced on Jan. 15, should help patients struggling financially. Although voluntary, they're expected to be widely adopted because they were developed by groups including ACA International, an association of collection agencies, and the Healthcare Financial Management Association, which represents financial officers at health care providers and insurance companies.
Joe Fifer, HFMA's president and CEO, calls the guidelines "mostly common sense." Among other standards, they recommend making bills easy to understand, ensuring hospitals and collection agencies aren't sending a patient bills at the same time, and notifying credit agencies when a billing dispute is resolved so it's removed from the person's credit history.
Meanwhile, the Internal Revenue Service is expected to soon issue regulations, required by the Affordable Care Act, barring nonprofit hospitals -- about half those in the U.S. -- from charging uninsured patients more than the discounted rates for insured patients. The regulations also will include protections from abusive collections practices and require nonprofit hospitals to inform patients about available financial assistance and eligibility rules.
Congress, the Consumer Financial Protection Bureau and some state legislatures and attorneys general also are studying how hospitals and collection agencies deal with patients with medical debt, with some bills to address issues already pending, Rukavina notes.
In the meantime, patients getting expensive treatments should work with the provider to avoid sticker shock.
-- If insured, review your policy to see what your deductible is and what other costs you could face.
-- Get cost estimates up front so you can decide whether to proceed or perhaps should delay elective procedures.
-- Contact the hospital's financial counseling department before planned treatment or soon after emergency care. Ask about charity care, both from the hospital and government programs such as Medicaid. Even insured patients may be eligible. Fifer notes nearly all uninsured patients get discounts off the "list price" for hospital services, just as insured patients do.
-- Ask whether there's a prompt payment discount, which can be 20 percent. If the bill's not huge, perhaps you can put off other expenses. Otherwise, set up a schedule to pay the hospital over time.
-- Try to reach agreement with the hospital on what you'll have to pay and the time frame -- before it sends your case to a collection agency. If that happens, your credit could be damaged for years, affecting your ability to get a mortgage, car loan or even a job.
-- If the hospital doesn't provide enough financial aid, contact the Patient Advocate Foundation. It helps patients with expensive chronic conditions or sudden large medical bills, offering copayment or insurance assistance, dispute mediation and other services. Go to www.patientadvocate.org or call 800-532-5274.
-- If pricey medication is adding to your debt, be aware that drug companies generally offer aid to patients taking their medicines. Also an industry group, the Partnership for Prescription Assistance, at www.pparx.org , helps patients without prescription drug coverage.
-- Check your credit report to make sure resolved bills or any errors are removed from your credit history.
-- If you can't resolve issues, try contacting your state's consumer protection bureau or attorney general, or the Consumer Financial Protection Bureau for help.