We noted in a recent blog post how serious a problem medical debt is for many individuals and families across the country, including in Texas (please see our September 13, 2013, entry).
Some commentators might amend the above sentence to read especially in Texas, given the dismal statistic that Texas has the highest rate of residents without health insurance of any state.
That lack of protection puts many Texans in a flatly precarious financial situation when medical-related outlays arise. Given the high and constantly escalating cost of health care, the close nexus between medical debt and bankruptcy is unsurprising.
Texans of a certain age well remember when treatment costs were considerably more manageable. Along with millions of other persons across the country, they likely also remember when hospital bills seldom if ever came with rigid payment schedules and interest fees attached. There was a time when medical billing offices were relatively accommodating with patient debtors in many instances about payment durations and amounts enclosed each month.
That time has largely passed, although recent developments in the realm of installment payment plans are being tinkered with in certain areas of the country. Payment service companies with names like CarePayment and ClearBalance have emerged to fill a special need based on ever-rising patient costs and what CarePayment’s CEO, Craig Froude, calls hospitals’ efforts “to figure out how to adapt.”
What some facilities are starting to do is to pay a fee to businesses like Froude’s company to collect patient debts. In exchange, they receive the amount owed from the servicing company. Both sides profit: The collecting company gets its fee, and the contracting medical facility forgoes lingering medical debts on its financial ledger.
Patients typically pay back their bills pursuant to installment contracts that can run as long as several years, generally without interest. Provided they comply with their contractual duties, their credit reports are not adversely affected.
Although that certainly sounds good, there is one potential downside to consider: An inability to keep up with the payments can result in an account going back to the hospital for review. At that point, a collection agency might become involved and a credit record can be damaged.
Persons seeking debt relief from out-of-control medical bills can receive confidential and knowledgeable information from an experienced medical debt attorney.
Source: Boston Globe, “Paying your medical bills is more complicated,” Ann Carrns, Sept. 25, 2013