Medical Debt: Accurate vs. Inaccurate

It’s recommended that consumers pull their credit reports at least once a year. Why? Because up to 20 percent of all Americans are estimated to have some sort of error on their report. Checking the report and taking the necessary corrective action is really the only way to have any issues resolved.

But according to a recent report in The New York Times, credit reports aren’t the only credit-related entity that’s problematic for consumers. In fact, The Times states that medical debt collectors are becoming a routine nuisance – and up to two-thirds of all who have complained to regulators about them say that they don’t owe the money that’s being asked of them.

Noting this, what can consumers do to decipher the difference between accurately and inaccurately reported medical debt? Here’s a look:

Medical Debt: Accurate vs. Inaccurate

The Times says that medical debt issues are the second largest debt-related complaint that is issued, only being topped by credit card complaints. Most experts state that issues related to medical debt are largely due to the current health care system as well as consumer confusion. However, The Times article also states that overaggressive debt collectors and debt collectors going after the wrong people can also pose an issue in medical debt collections. Here’s a look at how to better gauge if the medical debt you’re being asked to pay is accurate:

• Keep tabs on your records and keep notices on any treatments, office visits or hospital stays, or notices that you’ve received and paid. If you’re ever in doubt, contact your health insurance provider to better understand what your plan covers as well as what your deductible and co-insurance is.
• Contacted by debt collectors? Take note of the communication and refrain from making any immediate payments until you can contact your doctor’s office or insurance provider to understand whether you’re on the hook for said debt. If the collector is being abusive or acting illegally, immediately file a complaint with the Consumer Financial Protection Bureau.
• If you do owe toward a treatment or procedure, don’t pay with a credit card. The interest you’ll pay on the debt can hurt you more long term.
• Check your credit report annually: As we noted in the opening, doing so can help consumers sniff out any errors before they have a chance to hurt their purchasing power when applying for a loan or credit card, for instance. In the case of medical debt, it’s common for debt collectors to put small amounts owed on your credit report. However, these usually small amounts aren’t really worth it to aggressively go after for the collector, so it’ll just sit there. Noting this, it could blindside you.

The latest scoring system from FICO downplays the significance of medical debt as it translates to your credit score, so you don’t have to worry about a major impact to your purchasing power if you do need to settle a debt. It is important, however, to understand and get medical debt issues resolved.