Older adults face a challenging billing system that devotes insufficient resources to preventing, identifying, and correcting errors
The medical billing and collection system devotes insufficient resources to preventing, identifying, and correcting errors.77 Consumers trying to address the inaccurate bills are caught in a “doom loop.” This “doom loop” can lead patients to pay erroneous bills in order to make the problem “go away”78 and may be particularly common for people seeking credit to buy a house, car, or other major purchase.79
Complaints illustrate how difficult it is to identify an inaccurate bill, learn where it originated, and correct other people’s mistakes when consumers have no direct control over the billing and claims determination process. Some providers refuse to talk to consumers because the account has already been referred to collections. Even when providers seem willing to correct their own mistakes, debt collectors may continue attempting to collect a debt that is not owed and refuse to stop reporting inaccurate data:
I was transported to [hospital] from my home by [ambulance] company. On the way to hospital the billing information was given. Medicare plus a supplemental insurance. I never received a bill from anyone. On XX at XXXX p.m. I received a call from [a debt collection company]. The woman on the phone started off aggressively screaming at me that I owe them [$2300.00]. I told her there must be some mistake that both Medicare and my supplement insurance would have covered it. It has in the past. She started screaming very loud if you don't pay me right now I will put this on your credit report. I told her if you keep screaming at me I will hang up. She continued so I hung up [. . .] [Healthcare insurance company] advised me that the ambulance billing company never billed the invoice they held it then sent it on to collections, [ambulance] billing department. Supervisor 's name XXXX. XXXX has been in constant contact with [the debt collection company]. [The debt collection company] has continued to refuse to remove the information from my credit report even after they have been told from both [healthcare insurance company] and the billing office the invoice has been paid. [Healthcare insurance staff] at my direction has been weekly contacting them to have it removed. As of today XX, it has not been removed.80
Ensuring that the charges are removed from all three of the national credit reporting companies adds further complexity and can be a major source of stress and anxiety for patients:
[Three years ago], I was admitted to the emergency department. Last year, I found 3 COLLECTIONS charges on my credit report. My insurer promised to take care of both sets of charges/payments. I disputed the charges online with two credit reporting companies but I never heard back. Last year, I checked my credit reports again, and all 3 charges were still there. The collection agency agreed to research it. By the end of that month, nothing had changed except that now there were 2 additional inaccurate charges from the same hospital stay. I spent 2 weeks on the phone trying to find out who was billing me and why. It nearly sent me back to the hospital with the tremendous stress it created.81
Medical debts often are transferred or sold, making it even more difficult for consumers to address inaccurate bills in collection and credit reporting tradelines. Consumers also report that this effort takes a significant emotional and physical toll:
I still have not received a bill from this collection agency, but the collection account appeared on my credit report a few months ago. As I stated previously, I immediately contacted the original provider. They told me to contact the collection agency, so I did. The collection agency did the same thing! They told me to contact the original provider, and that filing claims “wasn’t their problem.” When I contacted the hospital AGAIN, they told me they couldn’t file claims or accept payment once an account is sent to collections. That the collection agency could, in fact, file the insurance claim.
I want the claim filed with my insurance company asap! I also want this to be removed from my credit report with all three bureaus immediately! I would also greatly appreciate an apology for the immense stress this has put me under. Not only has this caused my debt to go up, but this also caused me to suffer ill-effects to my health! I’m disabled and stress causes [chronic illness] to flare up, which means I lose some of the use of my left leg and arm. It also causes me to suffer extreme nerve pain, severe fatigue, migraine headaches, and simple-partial seizures!82
Another consumer described the burden placed on consumers, and the resources and time needed to resolve the problems:
Hospital staff eventually promised to make sure that all of these charges were removed from my records. The collection agency said they would remove them once they received information from the hospital. I checked my credit reports a couple of months later only to discover ALL 5 charges had been sold to another collection agency! Recently I decided to pay the darn bills even though I don’t owe them. This has lowered my credit score for three full years. I have new more severe chronic illnesses now and medical testing appointments scheduled this month. I can’t imagine how many people have similar situations and never get them resolved because they don’t have the time, access or resources to pursue fairness. I feel like a tiny squeaky cog in a gigantic perpetual motion machine... Our medical system, health insurance system and financial reporting system are set up to ensure one or the other will kill me before any disease.83
The challenges of navigating the medical billing system and resolving errors are heightened for older adults due to the presence of functional limitations. In contrast to adults ages 18 to 64 with unpaid medical bills, older adults with unpaid medical bills are more likely to face functional limitations such as hearing, mobility, or vision impairments.84 Those limitations can interfere with their ability to address inaccurate medical bills and credit reporting problems. Functional limitations may also affect their ability to reach a healthcare provider, biller, insurer, debt collector, or credit reporting agency on the phone, online, or by mail.
In addition, older adults with medical debt have limited flexibility in their monthly budgets to pay for these errors, even if the amounts owed are small.85 For example, 52 percent of older adults with unpaid medical bills report living on fixed incomes that are equal to or lower than their expenses, compared to 41 percent of adults ages 18 to 64 with unpaid medical bills.86 These challenges are even greater for older adults with unpaid medical bills who are dual beneficiaries of Medicare and Medicaid, because they face greater income and functional limitations than other older adults and report higher rates of unpaid medical bills.
Conclusion
Consumers face a complex medical billing system where inaccurate and erroneous bills are common and resources to prevent and correct errors are limited. This issue spotlight describes how unpaid medical bills persist even among older adults with comprehensive health insurance and those who have the greatest protections against out-of-pocket expenses and balance billing.
Inaccurate medical bills are referred to debt collectors and appear in consumer credit reports, and the burden of resolving them often falls to consumers. Yet, the complexity of the current medical billing system and the issues that lead to inaccurate bills make it practically impossible for consumers to detect and resolve errors before they are reported to debt collectors. These challenges are greater for older adults, especially those who face functional limitations or live on a fixed income.
CFPB’s scrutiny of the accuracy of medical tradelines reported on consumers’ credit reports has already resulted in significant changes to consumer credit reporting and debt collectors’ practices.87 The recent decrease in medical tradelines listed on consumers’ credit reports suggests that debt collectors are beginning to recognize these data integrity issues.88 This decline may be explained partly by structural dysfunctions in medical billing and collections, which increase the risk that debt collectors will not meet their legal obligations and will therefore decide not to collect on these debts.89
This spotlight highlights the need for additional steps to prevent and address the harm and burden placed on older consumers due to inaccurate debts arising from erroneous medical billing.
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