Debt Consolidation for Medical Bills, What is the Best Approach?

Q: I was in an accident while on vacation and it turns out that the ER staff and the ambulance are not a part of the in-network hospital, but out-of-network contractors. On top of that, I have bills from out-of-network doctors I never even saw who say that they “consulted” and are billing me. It was a serious accident, I’m still recuperating, I’m waiting for a settlement, but the damage to my finances may be terminal. I’m considering bankruptcy or debt consolidation, because I’m not sure how to even get started.

A: Medical outsourcing is not new, but the ramifications of the practice mean that people who think they’re covered for that visit end up with a nasty surprise. Now, Florida already has laws on the books that prohibit “balance billing” for HMO members, and the good news is that the state legislature is getting on the stick expanding those protections to everyone with insurance. It was passed on March 11, and is sitting on the governor’s desk waiting for a signature or to become a law if it’s left there for 15 days. However, I think that while consolidation or bankruptcy could be helpful, the first step you need to take in a complicated situation like this is to hire a patient advocate or medical billing advocate to make sure that you are getting good treatment and not being erroneously or fraudulently billed. After that, if you are still considering consolidation, you’ll want to work with a legitimate company or you could find yourself with a whole new pile of charges and bills to worry about. Bankruptcy should be a last resort; after all other measures have been taken. Come in for a consultation – which is free – and we can work with you and/or your advocate to get you on the road to recovery.

Q: Because of a flare-up of autoimmune disease, I am slammed with about $15,000 in medical bills – and that’s WITH insurance. I don’t have a choice about it – I get this care or I die. I’m scared, overwhelmed, and I’m struggling to hold onto my job and pay my bills. I don’t want to go on disability because it’s a political football and unreliable. I’ve been looking at consolidation that would make all these different bills into one payment – there are literally so many that I can’t keep track of them. Topping it off, my insurance company has let some of them that are supposed to be covered go past 90 days and into collections before paying. So, even though they’re paid, they’re on my credit report and I’m getting collections calls. TL;DR – My medical bills are becoming a full time job. Would debt consolidation for medical bills help or just become another problem?

A: Consolidation has the potential to help, but it comes with caveats. Loans are a business proposition, and loan companies make money not only from interest, but from fees associated with originating and servicing the loan. Unless you are using a legitimate consolidation service, you could – as you noted – end up with another problem. That said, for someone with insurance $15,000 seems like a lot of bills. In the post above I have recommended a patient advocate and a medical billing advocate, but I’m also going to recommend the services of an attorney – me – in order to keep the insurance company, collections companies, and medical providers in line. The consultation is free, just bring in the paperwork and we can get started.