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Don’t Pay Your Medical Bills Right Away

Kelli Grant, Medical Bills

With Kelli Grant, Personal Finance and Consumer Spending Reporter for CNBC

Kelli Grant, Personal Finance and Consumer Spending Reporter for CNBC., discovered that a startling 80% of medical bills contain errors. And although some are minor amounts, many are much greater and more serious.

We’ve been trained to pay our bills when we get them, but when it comes to medical billing, that may not be the smartest course of action. Kelli advocates a period of investigating and questioning each item before you pop that check in the mail. Besides looking out for incorrect charges, she advises that each statement or any piece of mail connected to the claim be carefully scrutinized since often a provider will jump the gun and bill the consumer before they get paid from the insurance company.

Kelli is careful to add the caveat that you should always make contact about a questionable charge as soon as possible to avoid the bill being sent to collections. In that vein, Kelli mentions how medical debts are being dealt with on credit scores after a 2015 settlement initiated some protection for a claim that might have been triggered by the insurance company and the provider, not by the consumer.

When Steve brings up a common lament that these billing statements are often confusing and beyond the comprehension of most of us, Kelli says that there are many advocacy services, such as Accolade and CoPatient, that can help manage health care benefits.

Steve and Kelli go on to discuss the fact that new chip and PIN technology has reduced credit card fraud but has shifted the criminals into the more frightening activity of identity theft. This is a warning to everyone who files taxes to be vigilant and guarded about IRS returns and your social security number, in particular, and to frequently monitor your credit report on sites such as wallethub.com. Kelli advises checking your personal contact info for signs of something fishy, which could be a tip-off that you’re being targeted for identity theft.

More of Kelli’s valuable advice and information can be found at cnbc.com

Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital.  Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances.  The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.

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Steve Pomeranz: Kelli Grant is my next guest.  She is the Personal Finance and Consumer Spending Reporter for CNBC.com.  And she joins me today to tell you, “Hey, when you get a medical bill, don’t pay it, just yet, anyway.”  Hey, Kelli, welcome to the show.

Kelli Grant: Hey, Steve, thanks for having me.

Steve Pomeranz: I’ve started taking your advice because recently I received a few medical bills that were just plain wrong.  And I had to make a few calls to get them right.  So I didn’t pay the bill until I was sure I was right. Is this something that is happening a lot, or is this just kind of a one-off type event?

Kelli Grant: This is actually surprisingly common.  The numbers depend on who you talk to but, obviously, among billing advocates who are seeing a lot of what they suspect are problem bills, they’re estimating it’s about 80% of medical bills have some sort of an error with it.  But even when you look at some of the broader surveys that have been out there, the numbers are anywhere from 8% to 50%.

Steve Pomeranz: 80% have some kind of error but probably maybe half of them are somewhat serious.

Kelli Grant: I think anything that costs you money is gonna be a serious error.

Steve Pomeranz: Yes. Well, I guess the question is we’re all trained to pay our bills as soon as we get them, on time, or at least when they’re due.
But you’re actually saying, “Hey, just wait a minute and check it out.”  Also, sometimes you get a bill that’s actually not a bill.  It’s just a statement saying the money you owe the insurance company, how does that work?

Kelli Grant: There are a lot of different things that you might get in the mail. And that is a key reason why you don’t want to just immediately be like, “I’m going to write a check,” and off it goes.  You really want to take a look and see if you can understand what is it that you’re being charged and why.  And in a lot of cases, what we hear from consumer advocates is that, on the medical billing front, sometimes you get a bill and you shouldn’t even have been charged that right away because the provider is billing you before they get the insurance payment. They’re kind of jumping the gun because they want their money.

Steve Pomeranz: Right.

Kelli Grant: And, of course, on any of these cases, it’s a lot harder to argue back money that you’ve already paid.  You want to try to take action before you’ve passed on any money to the provider with the big caveat right up front here: You do need to be very careful about medical bills that go to collections because that can be a really nasty black mark on your credit report. And some providers are really quick to do this, so you want to be clear that you are looking into it and seeing if you can get them to halt the billing while you investigate and potentially dispute it.

Steve Pomeranz: So, actually, you advocate contacting the insurance agency and telling them of your intentions of just waiting for a little while.

Kelli Grant: Well, contacting the provider specifically, usually, because that’s who’s going to be billing you.  But, at the very least, try to act on this quickly.  This isn’t something where we’re saying don’t pay your medical bills right away and then in a month really kind of assess it. If you’re thinking that this looks a little fishy, then try to take action on that right away, or at least open up that dispute with them.

Steve Pomeranz: Well, some of these bills are pretty complex, and I think they’re above and beyond how our understanding of how the system works.
I mean, we’re all busy doing what we know how to do well.  Now we have to be experts in medical billing.  I mean, that’s a little ridiculous.  How are some companies helping their employees deal with this?

Kelli Grant: There’s actually some pretty good data out there from Ann Hewitt that states about 45% of companies offer advocacy services to help workers manage their health care benefits. So, these are going to be services like Accolade, is a big one.  You’re going to see CoPatient is the other big one that we’ve been talking a lot about lately.  And you might have access to this through your employer or just through your insurer.  And, in most cases, there are a lot of billing advocates, too, where you can just hire them as a one-off, where you send them the bill.
They’re going to go review it for free, and then they’re going to tell you if they think they can save you money.  You’ll pay, essentially, a portion of those savings.  But through your workplace, generally speaking, this is going to be a free benefit where they’re going to review the bills for you and give you some sense of, do you pay or do you not pay.  And they’ll do a lot of the legwork on the dispute, as well.

Steve Pomeranz: There have been some new laws recently when it comes to looking at your credit report that has put less emphasis on the prepayment or the repayment of medical bills.  What’s that? Tell us about that.

Kelli Grant: Well, that’s true, there have been some changes there.  A lot of them are part of this 2015 settlement that had gone between Attorney General Eric Schneiderman and some of the big bureaus, where it’s in how they process and how they report medical debts on your report.
What I’m hearing a lot of times from experts who are looking at these, it’s still going to be something where you should be a little concerned with it.  Particularly in regards to your credit score.  The bureaus have to kind of re-assess, and FICO has said that they’re gonna re-assess how those debts are processed. But a lot of banks don’t use the newest version of the scores, so if you have a debt on your report, it’s probably still going to have an impact on your score.  So, there’s a lot of ins and outs there.  And you will want to take a look at when a lot of these protections are phasing in, what they might mean for you. A lot of it also depends on is this a dispute that, say was triggered by the insurance company, they did their back and forth with the provider about how much they were going to pay.  Sometimes then the provider will send it to collections, and it wasn’t even that you got the chance to say, I’m not going to pay that. It was that the insurance company didn’t act fast enough.

Steve Pomeranz: Yeah, that’s totally-

Kelli Grant: Those tend to be treated better.  But if you would say, I’m not going to pay because I think this is wrong, that might still be something that lingers on your report.

Steve Pomeranz: Yeah, so it sounds like a bit of a bureaucratic administrative transition here.

Kelli Grant: Definitely.  Do you have a headache yet?

Steve Pomeranz: Yeah, I’m getting one. Thanks for asking, but don’t charge me for the aspirin, please.

Kelli Grant: I’ll send you the bill after.

Steve Pomeranz: [LAUGH] Let’s switch gears here.  You also wrote an article about the new credit cards and how credit cards now have a chip on them which is preventing one type of fraud. But it’s starting another type of fraud.  You want to talk about that a little bit?

Kelli Grant: Sure, yeah, this is a scarier trend for consumers.  As we’ve seen this shift to credit cards that have the PIN technology as opposed to some of the older cards that were relatively less protected.
Identity thieves, and just criminals in general, they’re more interested in getting the important information about you, like your social security number, rather than something like your credit card number.  The credit card number is not as useful, the way essentially these chip and PIN cards work is that it generates a unique transaction code every time you use the card. So, someone stealing the number for your card is not really getting the correct information that they would need to go up and rack up a lot of bogus charges, as they might have been able to do in the past.  But if you have somebody who steals your social security number, well, they can just go open a credit card in your name, and then they can rack up whatever charges they want on that.

Pomeranz: So, yeah.  So let’s talk about that.

Kelli Grant: So, that’s where we see the spike there.

Steve Pomeranz: So the fraud of them actually getting your credit card number and doing transactions, that’s not eliminated, but it’s being reduced.  But, now, these thieves are trying to open up new credit cards under your name because they have your vital information and that’s pretty dangerous.

Kelli Grant: Exactly, and that’s the sort of stuff that we’ve seen more and more popping up.  When you look at the reports and even if you think about the big data breaches in recent years, a lot of the ones that had been out there. You think about the IRS, for example, a lot of the government databases that were mined, health insurers that were mined.  A lot of what ended up was stolen social security numbers.  We see, also, it pops up big, not just in new account fraud, but we’re talking about just having wrapped up tax season.  Thieves also like to be able to use fake tax returns in your name and snag some refund money.

Steve Pomeranz: Yeah, so I think I’m going to go down with cash next time to the IRS office and just give them cash.

Kelli Grant: I’m sure that they would love that.

Steve Pomeranz: My guest is Kelli Grant.  She’s a personal finance and consumer spending reporter for CNBC.com.  So Kelli, how do we protect ourselves from nefarious entities opening up credit cards that we didn’t approve?

Kelli Grant: Well, you need to be monitoring your credit report, for sure.  There are a lot of free websites out there that will give you a better handle on it.  And, of course, you’re entitled to pull your report from annualcreditreport.com.  A lot of the other sites that are out there are like Creditkarma.com, wallethub.com. They’re going to give you regular access and they’re going to send you alerts about any changes in your reports that you might want to keep an eye on.  Things like new inquiries, obviously, are going to be red flags.

Steve Pomeranz: Yeah.

Kelli Grant: So are new accounts.  And then, really, you also want to pay attention to, oddly enough, all of the contact information that’s listed as yours, because that’s going to be another sign that maybe there’s something fishy going on. If you start to see maybe a version of your name that you’ve never used that pops up, or an address that you’re not associated with that is suddenly associated contact information for you.  That would be something you’d want to dig into.

Steve Pomeranz: Yeah, so just look for unusual activity. Look for unusual usages of your name and any other data.  Just look for the irregular and keep good tabs.  Now, some of these sites that will report to you irregularities, those are paid sites.  But you’ll have to determine whether it’s worth paying a couple of bucks to get this kind of protection, right?

Kelli Grant: There is paid monitoring.  But a lot of the sites, the ones that I had just mentioned, all of those are free, where they’re going to give you that regular report access that you want to think about.  Something else that you might want to consider, and this is another paid option, would be to do something like credit freeze, and that’s going to prevent anyone, including you, from opening new lines of credit. But usually, the rules on that are going to vary by the bureau and by the state.  But it can be a charge of maybe up to $10 depending on that, for every time you want to put the freeze in place, or temporarily lift it to, say, apply for a mortgage or get a new credit card.

Steve Pomeranz: Okay, all right.

Kelli Grant: But that, also, it’s not perfect protection because it’s not going to help you if there’s tax return fraud, for example, or any of the other many things that someone could do with your social security number.

Steve Pomeranz: Good stuff to learn about.  My guest, Kelli Grant, Personal Finance and Consumer Spending Reporter for CNBC.com.
Hey, Kelli, thanks for writing this stuff and informing us all.

Kelli Grant: Thanks so much.