Strategy for Paying Med Bills

You can deal several different ways with creditors like doctors, ambulance companies and hospitals. First choice is to ask them to “accept insurance.” This means that they will take as full payment whatever your health insurance company will pay them.

Beware of something called “full balance billing.” This is best illustrated with an example. If the creditor has an agreement with health insurance companies like Blue Shield or Blue Cross, that agreement says that the provider can charge you CERTAIN LIMITED AMOUNTS for services. In other words, the regular price might be $4,000.00 but the agreement might say that you get it for $400.00 (which is an example of something that really happened in a different case). Some providers take the position that, even though they agreed with the health insurer to take only the $400.00, they can turn around and bill you for the difference. In the view of many, that is INCORRECT and unfair. Do not agree to pay the full balance. Keep in mind that one of the services that an attorney will provide is the negotiation of such bills.

Second choice is to ask them to “take a lien” on the “case.” This means that they will agree to not press you for money until the case or claim settles, at which time they will be paid through the settlement. The advantage is that you do not have to come up with the money now (which in any event would be repaid to you out of the settlement). The other advantage is that you or your attorney would have a chance to negotiate (i.e., reduce) their bill. If they agree to this, they will provide you with a form to sign, which you should permit your attorney to review before you actually sign it. If the provider does not have the form, tell them to call your attorney, who will send a form to them.

Third choice is to pay the amount (either the amount that they ask for or an amount that you negotiate), and get reimbursed from the settlement.

If you fail to do any of these things, the likely outcome will be that the matter will be turned over to collection. However, there have been cases where the provider “writes off” the balance (i.e., reduces it to zero).

Also see Third Party Claims