Credit Bureaus Remove Medical Debt, But Hospitals Can Prevent It

The three major credit bureaus – Equifax, Experian and TransUnion – have a great influence on the financial well-being of millions of Americans. For the many people in our country who are burdened with medical debt, the bureaus plan to remove nearly 70% of that debt from consumer credit reports. Further illustrating just how serious the situation is, the White House also recently announced a Medical Debt Initiative.

Medical debts under $500 will no longer be included and patients will have 12 months to settle outstanding balances that are in collection before their credit report is canceled. Credit bureaus will also completely remove paid medical debts from credit reports, instead of just marking them as “paid.”

These are useful homes for the 1 in 3 Americans living with medical debt. But affordability in the first place is the real challenge. Even insured people can receive a bill for more than $2,000 after spending a single day in the hospital. Many of them are eligible for financial aid and don’t even know it.

Financial assistance programs are like preventative care

Hospitals have a tool that specifically addresses affordability for their patients. Financial assistance programs are already established in hospitals across the country – non-profit hospitals are required to have them and already offer them – and these programs can prevent many patients from having accounts sent to collections. in the first place.

Hospitals also benefit from connecting patients eligible for financial assistance with their program. Patients should know that their hospital has a financial assistance program, and these programs should be accessible and easy for patients to navigate.

The White House gets involved

The White House recently announced new actions to ease the burden of medical debt, saying providers “should make it easy for eligible patients to receive the financial assistance to which they are entitled.” Too often, financial aid programs are hard to find or have a complex application process.

The White House plan involves reform in four areas: Holding medical providers and debt collectors accountable for harmful practices; reduce the role that medical debt plays in determining whether Americans can access credit; helping more than 500,000 low-income US veterans get their medical debt forgiven; and inform consumers of their rights.

Who can benefit from financial aid?

There is a common misperception that a term like “financial aid” only applies to the poor and needy. But the qualification threshold is higher than most people think.

These programs typically extend to people whose household income is several times higher than the federal poverty guidelines. In other words, many working families and fixed-income households are often eligible.

It can’t be too complicated

People admitted to hospital, whether for a planned procedure or an emergency, have enough on their plate. Filling out pages and pages of forms and questionnaires, requesting copies and printing out sensitive financial information is no fun anywhere. In the hospital, this is even less the case.

Hospitals should treat these forms as if it were all based on need to know. If the answer to a question is not critical to the patient’s eligibility for the financial assistance program, do not ask it. If it impacts eligibility and helps a hospital receive reimbursement, go for it.

A win-win

Low-income families struggle to save money to buy a house or a car, let alone pay for open-heart surgery or the bills of having their child’s appendix removed. It’s not about providing care for free; it’s about helping patients who can’t afford to pay their hospital bills.

Most patients who have the ability to pay do pay, and it is perfectly reasonable to expect them to. But many patients who qualify for financial assistance under their hospital’s policy need help from their hospital. Whether it is a partial discount or completely free care, hospitals should make it as easy as possible to obtain the necessary support for those who truly qualify for the program.

While it may seem counterintuitive for hospitals to proactively offer discounts, when managed well, discounted care is far better than billing patients that they can’t afford. to pay to collections, where little is ever recovered.

People want to be healthy and debt-free, and hospitals want to care for patients, not chase after them for unpaid bills. People shouldn’t delay or forgo the care they need because they think they can’t afford it. Necessary care should not lead to bankruptcy.

Credit bureaus writing off medical debt and the White House championing the cause is a win for patients. But hospitals have the opportunity to take a pro-financial, patient-friendly approach to assistance and maintain the positive momentum. Fortunately, financial aid packages are ready and available for hospital leaders looking to make this happen.

Photo: freedigitalphotos user Naypong

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