Nurse: For me, this is just one more symptom of the overall huge problem of the way our health insurance and healthcare systems (fail to) work. I was especially surprised that FICO said it doesn’t consider medical debt any differently from other debts– so debt you incur for being irresponsible is the same as debt you incur for being genuinely unlucky. You got sick and couldn’t pay? Your credit score takes the same bump it does if you overspent your credit card at Saks.
Lawyer: I don’t know much about how FICO operates, but there are lots of shades, too. I mean, student loan debt is different from credit card debt is different from your cell phone plan is different from healthcare.
I suppose one could argue that their job isn’t to measure how “responsible” you are, so much as how responsive you are in paying debts that you do have, no matter why you have them.
But one of the real problems seems to be that people get caught in this crazy maze of not knowing who’s actually responsible for what, or wanting to dispute certain things, and having that process damage their credit (rather than straight up unpaid bills — which is also a problem, but a different one.)
Nurse: It sounds like the bill under discussion here is reasonable– removing these medical credit black marks more quickly– but I don’t know, do you think there would be unintended consequences? I don’t buy the “quality of data” decline that the credit agency advocates are pushing.
Lawyer: I agree that it seems like a reasonable bill. And the “quality of data” thing sounds like a crock to me, too, especially given the high rates these stories are reporting of things being either straight up errors or being matters of genuine dispute. I think other possible solutions involve including that info in the reports, but separating it out and clearly identifying it as a specific type of problem, so that users of the score (e.g. lenders) can evaluate whether they find it relevant or not. Or doing what they do with credit cards — forbidding them to report it to credit agencies in certain types of dispute situations, pending some reasonable resolution of the dispute.
Nurse: Of course, this doesn’t even get into the fact that, as the article points out, billing errors are rampant. That goes back to my original point that the system is so far broken, what can we do? You can’t get a doctor or hospital to quote your a price for treatment, so how are you supposed to really evaluate if you’ve been billed correctly? Have you ever tried to use an insurance company phone tree? Have you ever tried to do any of this while you or a family member was ill?
Lawyer: A classmate in the business school here was recently overbilled for a procedure, and it took her (a Stanford MBA student) a huge amount of time and effort to get it sorted out — she also says she just barely caught the error. I hate to imagine how difficult it would be for someone who doesn’t have any background or training in dealing with such things. Where do we lay the blame? Maybe the problem is with hospitals sending things into collection too quickly, without addressing/resolving disputes with patients first. (See above proposal about not reporting to credit agencies during a dispute resolution process.)
Nurse: On the bedside debt collectors: dude, not cool. Hospitals may employ debt collection agencies, and they often do, which is ok, but allowing them into patient care areas? This is slimy, having debt collectors posing as hospital employees, or having them demand payment before treatment in the ER. Isn’t that illegal, lawyer? EMTALA?
Lawyer: I don’t know much about EMTALA (that’s the Emergency Medical Treatment and Active Labor Act) — I think it forbids refusing care based on inability to pay, but I’m not sure it forbids demanding payment in advance where possible. I could see a problem arising if the hospital didn’t make it clear to the patient that they would receive emergency treatment even if they couldn’t pay. (In other words, if they mislead the patient, and the patient leaves without care, that could be trouble.)
It certainly sounds like some of these practices are some kind of possible fraud or misrepresentation. And it probably violates state law in a lot of places that have good consumer protection laws.
Nurse: Yes, my concern is that it may seem to patients that they are or will be refused care if they can’t pay, even if that’s not really the case– it’s essentially intimidation on the threat of not receiving care. Patients, you are entitled to evaluation and stabilization in and ER, whether or not you can pay, and whether or not you owe anyone money. They can ask you for payment, but they must evaluate and treat you, payment or not. Also not cool: You should not need to fear that seeking treatment in an ER will lead to your harassment for current or previous bills.
Lawyer: Very good point.
Nurse: Yes, hospitals provide uncompensated care. No, they can’t fix it this way. Unless they care more about money than about care– in which case, they should go work for Goldman Sachs, am I right?
Lawyer: Maybe it’s kind of a desperation play? Because heaven forbid we should work to reduce the cost of care. That would probably do more to keep the doors open.
Nurse: Yeah, I mean, they try that, but it’s a big, messy problem. True, you can’t provide any care at all if you are entirely broke– but there is a line, and this practice crosses it.
Lawyer: Where do you think that line is? Is it okay to just talk about payment before providing care (assuming the person isn’t actively dying at the moment?)
What about people who actually legitimately incur costs that they can’t pay — when can the hospital start pursuing them for payment?
Nurse: I think if they could tell you what it will cost, and make it clear that your will receive treatment no matter what, it might be ok. But it’s pretty near impossible to find out what a medical treatment is going to cost you before you get it. Just try sometime. You’ll be told, “well, it depends. . . .” There have been lots of studies comparing costs of treatments lately and it’s just wild.
I would not want to work as a nurse in this environment– and I think my duty as a patient advocate would be to treat and protect these patients upfront. After they are treated, on their way out, fine, but not on my watch.
Lawyer: Luckily, a lot of times when debt is sold, it’s done sloppily, so collection agencies sometimes sue for collection and it turns out they don’t have clear enough records to actually state any kind of legal claim to the debt. (Though this happens more with consumer debt than with medical debt, which is, perhaps obviously, more closely tied to the person who incurred it.)
I don’t know how that interacts with the credit agencies.
For now, I’m gonna put my money on state law for eliminating these abuses. But fingers crossed on the federal laws about credit scores, too!