Oregon Money Management Program
Session #9 – Medical Debt and Credit Reports
Revised 6/23/16
Welcome to the Oregon Money Management Program New Volunteer Training Session #9. In this session you will learn how to help a client with:
· Medical Debt
· Medical Billings
· Medicare Fraud
· Credit Reports
Most OMMP clients have difficulty managing debt. That can include credit cards, personal loans, installment loans, and medical debt. Volunteers should keep in mind that federal benefits are protected against most collection efforts. However your client should keep in mind when deciding what debt they pay. If they don’t pay a bill that provider is not likely to continue to help them. That can be especially problematic for clients that have physicians that they prefer.
Medical Debt
Unlike other forms of debt, most people do not have a choice when it comes to accruing medical debt. Some medical providers are willing to work with patients to resolve billing issues; others take more aggressive tactics like turning the bills over to collection agencies.
Doctors realize that medical insurance rarely covers 100% of the cost of many procedures. Doctor and medical offices are usually willing to make monthly payment arrangements. They do not want the hassle of dealing with collection agencies any more than your client does. As long as a reasonable amount is set and payments are made on time, doctors and medical offices are not likely to sell the debt to a collection agency. In some cases, healthcare providers offer charity care or financial assistance programs for low-income people. If your client recently became eligible for Medicaid, you might check to see if retroactive coverage for Medicaid is an option.
Be sure not to transfer medical debt to a credit card for two reasons:
1. Interest rates on the credit card will add significantly to the total debt and transferring medical debt to a credit card may affect eligibility for Medicaid.
2. Some medical costs can be deducted from gross income to determine Medicaid eligibility. Medical debt on a credit card may no longer qualify as medical debt.
Medical Billings
According to a survey conducted by the American Medical Association, one out of five medical claims is processed incorrectly by insurance agencies. Nearly one in three Americans let medical bills go to collection because they did not understand the bill or the insurance explanation of benefits statement.
OMMP volunteers are in an ideal position to help clients avoid medical billing errors and debt. While insurance policies protect people from unpreventable financial hardships they are also difficult to read and understand. When working with a client you may want to ask if they have a copy of their health insurance policies available so that you can help them if medical billing issues arise.
Compare medical billings with Explanation of Benefits to determine the amount that the client is responsible for paying. For Payee or ICT clients receiving Medicare, a copy of their Explanation of Benefits is sent to your OMMP office. For Bill-Pay clients, Medicare Explanation of Benefits are mailed to them.
Check with your client or their care provider to determine if the client received the services listed on the bills. Billing errors can simply be honest mistakes or intentional attempts at Medicare fraud. Either way errors can result in extra costs to OMMP clients or taxpayers. Compare the Explanation of Benefits to medical bills received by your clients to ensure that the amount billed is correct. If you have questions about the amount owed, call the billing office during your client visit. In most cases, billing office staff will only speak to you if their patient has given them permission to do so. Usually permission can be given verbally over the phone. Once you have permission, you can ask for clarification on any needed corrections.
Medicare Fraud
Medicare fraud is a serious problem that costs taxpayers billions of dollars and put beneficiaries’ health and welfare at risk. You can play a vital role in protecting the integrity of the Medicare program by keeping an eye out for Medicare billing errors.
Examples of Medicare fraud may include: Billing for services or supplies that were not provided, billing for appointments that the patient failed to keep and altering claims forms to receive a higher payment amount. If medical billing errors are found, you can help your client request a correction and help them follow-up to ensure that the correction was made.
Credit Reports
Late payments and unpaid debt will have a negative impact on an individual’s credit report. Most people work hard to avoid a negative credit report because it impacts our ability to acquire future credit at lower rates.
Having a poor credit score can have a negative effect on clients when applying for affordable housing because landlords have the right to deny housing based on credit history. Before your client submits a preliminary application for affordable housing they may want to check on the credit qualifications of the complex, doing so, can save a lot of time if your client’s credit is not up to par. Poor credit scores also create a barrier in obtaining credit cards and loans. This can prevent OMMP clients from incurring new debt, which can be a good thing. As you can see, a bad credit score can be a two-edged sword that can have a positive or negative impact for clients.
Information on credit reports fall off after seven years. If your client has to decide which debt to pay, it may be wise to let the old fall off and make payments on newer debt. A federal law requires that individuals be able to obtain a free credit report once a year from each of three credit reporting bureaus. If your client would like to review and understand their credit report, please visit www.annualcreditreport.com.
This concludes session #9 of the OMMP volunteer training. For questions about information covered in this session, please contact your Program Coordinator or Team Leader.
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