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Have Medical Bills in Collections? Dispute a Medical Bill with these 6 Tools

Need to dispute a medical bill in collections that you do or do not actually owe (medical bill wrongfully sent to collections)? I'm sharing the 6 tools you can use in your fight (plus a medical bill resolution letter – pdf).

For the first 7 months of this year, I was in a battle with medical collections for a medical bill.

woman with pen and notepad on laptop, text overlay "6 tools for fighting excessive medical bills + collections help"

Not just any medical bill – one that was totally erroneous.

I guess it didn’t start out that way, but it progressed to me cringing at thinking about going to the mailbox (so I would only check it once a week), and delaying doctor checkups for myself (a losing proposition at best).

And the kicker is, the medical bill I was battling?

Was for a preventative care appointment for my son. You know, the type of appointment that’s 100% covered under any insurance plan.

See why I said it was totally erroneous?

Psst: get the exact medical bill resolution letter that got us out of $1,097 in medical debt.

If you’re dealing with a medical bill that is completely wrong – either incorrect charges, or something like ours where we should not have received one in the first place – then I’ve got you covered.

On top of how to dispute a medical bill sample letter, I’ve listed these tools from what you should start with (least aggressive) all the way up to the “big gun” tools that you can use to aid you in your fight.

Pssst: you definitely want to read this article I wrote on how to deal with debt collectors.

But first, let's discuss a few key pieces of information for you to know about a medical bill in collections.

How Long Can a Medical Bill Be in Collections?

Do medical bills ever go away, and how long can a medical bill be in collections? Both good questions.

There is a medical bill collections statute of limitations. Medical bills are a written contract, and you can find out your own state's statute of limitations on that kind of debt here.

Do Medical Bills Affect Your Credit?

Yes, medical bills in collections will very likely affect your credit.

According to Experian, one of the big three credit rating bureaus,

“Experian no longer displays medical collections on a credit report until they are 180 days past due. This grace period gives individuals with medical debt six months to resolve any insurance or billing issues and to make payment arrangements if necessary before the past due balance is reported…”

That buys you a little time.

You should know that hospitals and medical providers ARE able to reverse their reporting of your delinquency to the credit bureaus.

So, the best thing you can do (and especially within that first 180 days to avoid having anything on your credit report) is to call the medical provider and work with them on a payment plan, or on fixing any errors they made (like the situation we dealt with).

How to Negotiate Medical Bills in Collections

Did you know that even if you are making small payments under some sort of agreement with a doctor or hospital office, they may still send your bill to collections?

Frustrating, I know.

Heck, we almost got sent to collections for a bill we didn't even owe!

But let's assume that you actually owe the bill, and you'd like to know how to negotiate medical bills in collections.

Let me give you a few tips (here's a whole article I wrote dedicated to dealing with debt collectors you'll want to read):

  • Get Your Debt Validated: Any debt collector who calls you needs to validate your debt. According to the Fair Debt Collection Practices Act, within 5 days of contacting you the third party collector is required to provide you with a validation notice stating the alleged amount of debt, the original creditor, and the process for disputing the debt, but they often fail to do so. Making them do this will buy you some time.
  • Offer to Settle in Cash for a Discount: Cash is King. If you can send them a money order for 50% of what you owe…would they accept that? Would they accept 30%? Get everything they agree to in writing. otherwise, they might accept what you give, then sell your bill down to the line to another collection agency.
  • You Can Sue Them: You can sue for up to $1,000 penalty + reasonable attorney's fees + court costs + actual damages if a collection agency is in violation of any of the information in that article linked to above.

Check out this article for several more ways to negotiate medical bills over the phone.

Let's talk now about the 6 tools you have at your disposal when dealing with medical bill collections.

Tool #1: Politeness with a Hint of Charm

No, not kidding. And yes, I realize how hard it is to be extremely polite and diplomatic when you’re an angry victim.

I have found – through dealing with a ton of customer service issues over the years (including how the heck to get through to a live person) – that being polite gets you Fievel-Goes-West far.

In my experience, it’s the reason why a rep might personally follow up with you on an issue might stick their neck out for you, or might give you a nugget of information no one else shared that will blow your case wide open.

It’s a tool, use it wisely.

Tool #2: Billing Department Manager

If you are getting nowhere with the employees from the billing department, then you should next ask to speak with their manager. This is common practice in customer service and works in insurance/doctor’s offices as well.

You’ll likely be put on hold while the situation is explained to the manager, and you may even need to wait for someone to give you a callback.

Did you get through to the manager? Be sure to ask for her/his name, and phone number, and to follow up with you on any actions they said they would take on your behalf during the phone conversation.

Tool #3: Your Company's Employee Assistance Program (EAP)

I had no idea, until recently, that your employer's Employee Assistance Program (EAP) can help by acting on your behalf to dispute medical charges.

Of course, this depends on what your employer's EAP offers (if you have one – but many companies offer these), so be sure to check with your benefits package and give them a call to discuss the issue.

Tool #4: Patient Liaison Officer

Did that manager not give you a satisfactory outcome…or did they give you the runaround?

Your next best bet is a Patient Liaison Officer. This is someone who goes above even the manager in the billing department (could be called something different within the clinic/hospital/etc. that you’re dealing with).

No one bothered to tell me one existed when I was in my 7-months long battle. So, if nothing else, ask someone you speak with in the billing department if someone exists within their organization to help facilitate issues on your behalf (hint: they’ll be more apt to tell you if you used Tool #1 when dealing with them).

You can also, of course, google it as well.

Once I found out this position existed, I immediately sat down and wrote them a letter (there was no phone number or email available for them). I followed their instructions exactly, including the information they asked for.

Then I sent my letter off. Luckily for us (didn’t feel so lucky after 7 months), within 6 days they cleared us of the debt we owed.

Hint: You could also use the government’s complaint letter wizard to help you fill out everything as efficiently as possible.

Tool #5: Better Business Bureau

The Better Business Bureau (BBB) exists to help consumers solve problems in the marketplace when their complaints aren’t being answered.

So why not use them for healthcare/insurance issues as well? That is if you can’t solve the issue within the organization itself.

You can bet I was very close to submitting a complaint with the BBB. In fact, if my letter to the Patient Liaison Officer had not worked, that’s exactly what I would have spent my time doing.

The BBB attempts to close all complaints (i.e. deal with them) within 30 business days. Not bad!

Their process looks something like this:

  • Submit your complaint to the BBB.
  • The BBB forwards your complaint materials to the company within 2 business days.
  • Receives a response from the company, or if not, the BBB resubmits the request.
  • You’re notified of any results, whether the company responds or doesn’t.

Tool #6: Insurance Commissioner for Your State

Still not receiving help or a suitable answer to your complaint? If you’re here, then you’ve exhausted all other possibilities.

It’s time to take it to the top. That is if the problem rests with your insurance company.

For us? The problem was actually with the doctor’s billing strategies. So, contacting the insurance commissioner of Texas would not have helped.

If your problem deals with your insurance company, then know that there is an insurance commissioner in each state to help with bad insurance issues you’re dealing with and who may be able to help you.

Find your Insurance Commissioner, by state and contact them with the details of your case.

Complaints they may be able to help with include:

  • How your insurance claim was handled
  • How your insurance policy is laid out
  • If you think your insurance company is breaking the law or has broken the law

Our Personal Experience with Fighting a Medical Bill Wrongfully Sent to Collections

I originally titled this article:

How to dispute a medical bill sample letter that got us out of paying a $1,097 medical bill we didn't owe, in 6 days (after a 7-month battle).

Long-winded, I know. But so was the medical bill battle we went through.

Since starting this 7-month-long battle with our doctor’s office + our insurance company, I’ve learned that many of you are facing your own erroneous or just plain bizarre medical bill battles as well.

I know, unreal. And yet we lived it.

After logging more than 15 hours on the phone with both our insurance company and our doctor’s office, I'd like to explain what the heck went wrong.

Pssst: I’ll even share with you the actual letter I wrote to dispute medical bill that got us out of this $1,097 hell hole.

Doctor Appointment with Changed Insurance

Within a month of us welcoming our baby into the world, my husband had gotten a new + improved job. So, we switched insurance companies with an effective insurance start date of 12/07/2015 for each of us.

Except one thing happened: our insurance put the wrong effective date (01/01/2016) for our son into their system. But that's a tidbit of information that becomes more important later in this article.

On 12/10/15, my son had his 2-month, preventative-care appointment.

As we were checking in for the appointment, it popped up that we owed $232.70 from a previous bill at the hospital (probably his pediatrician coming to visit him). I paid for this with my Mastercard.

Our Doctor Sent the Claim to the Wrong Insurance Company

Our doctor’s office made a mistake and sent this $ 1,097 claim to the old insurance company, even though we had updated them with our new insurance information.

Fast forward over a year later, and the old insurance company finally gets smart on this. They ask for a refund of the insurance amount.

At that point, our doctor’s office submits the 13-month-old claim to our current insurance company, Cigna.

Except there's a problem; it gets denied because of the errant effective date showing 01/01/2016 for my son.

My husband makes several phone calls to our new insurance company + his HR department and resolves this issue. We've issued a letter – and sent it to our doctor’s billing office – showing the correct effective date is, in fact, 12/07/2015.

Our doctor's billing office then resubmits the claim.

They get denied again.

The issue? Per their contract with our insurance carrier, they only have 90 days after an appointment to submit the actual claim paperwork.

Of course, there's one problem with this scenario: they weren't told by our old insurance company that the claim had been denied until 13 months after the appointment.

And then things got really interesting.

Trying to Collect On a Debt Paid a Month Earlier

I got a letter in the mail from the doctor’s billing department saying that I owe them $118.59. It just so happens that I had already paid $118.59 just a month earlier. Like, to the penny.

This was for an appointment I (Amanda, not my son, Conner) had in January.

Instead of taking that money and putting it into my account, they took it and put it on Conner’s $1,097 pending claim with insurance. So, it appeared as if I was overdue on my own medical bill.

After speaking with a manager, they were “allowed” to credit that money back onto my account, and not on my son's.

Honestly, I didn't think it'd be legal for them to have done that in the first place.

And then it gets even more interesting (and by more interesting, I really mean more painful to deal with).

Trying to Collect on an 18-Month-Old Debt that I Already Paid

I was being told by the doctor’s billing department managers that I had to pay this claim because I had signed a document saying I would pay whatever insurance did not (you know that document your doc’s office gets you to sign while you’re standing in line, with a fever? Yeah, it contains some juicy stuff).

I called our insurance company and had an expedited claims review order put through. We had a three-way call with someone at the doctor’s billing office who said she would send over the paperwork showing the initial claim to the wrong insurance company.

When that old insurance company kicked back the claim and asked for a refund, for some reason these guys took $232.70 that I had paid towards that other appointment (you know, before my son’s appointment even took place back in December of 2015?), and put it on this $1,097 preventative care claim.

Which resulted in me getting another call from their billing department out of the blue, from another person who didn't know what was going on, and said I owed them $232.70.

After she figured out what our Doc's billing system was doing to us – taking money we had paid onto other claims and putting them onto this $1,097 pending insurance claim – she said that we would need to wait until the claim came through from insurance, then this amount of $232.70 would go back onto the bill it was supposed to be on.

Except then, they did something really sucky. They sent us to collections.

Receiving the Collection Notice

I received a letter from a collection agency, asking for (you guessed it): $232.70.

Psst: Here is a free PDF about the 7 Deadly Sins you don’t want to commit when dealing with debt collectors>>

To say I was seeing red would be putting it lightly. I think I was seeing a deep, deep, merlot. With hints of B.S.

I called our insurance company again, and this time put in a Patient Appeals Form over the phone. The woman thought we had a shot because − even though the other claims appeal was denied because our doc had sent in the claim beyond 365 days after sending it to the wrong company − it showed that the old insurance company did not ask for the refund until January 18, 2017.

We then three-wayed with a woman in the doctor’s billing department, who brought up the $232.70 issue. She said she would speak with her supervisor about putting it back onto the bill that had been sent to collections since this claim was being appealed with insurance.

While waiting, I went to my trusty filing cabinet, and within 5 minutes was able to locate not only the actual receipt of the $232.70 from that day but also the next billing statement from our doc's showing that the $232.70 had been credited to our account.

And within three hours I got a call that our doc's billing department decided that because the payment had been back in 2015, they could not put it onto the original bill it was meant for and take it off of the preventative care appointment.

You know, the one that is 100% covered, not-even-a-copayment-due under Obamacare?

I waited for a call back from a supervisor to enlighten me as to exactly why they took that money that was on another bill and applied it to a preventative care appointment that was pending with insurance.

Fortunately for us, I got a voicemail several days later from someone else who said they would take us out of collections and apply the funds properly.

The Review Comes Back Denied but With Some Enlightening Information

While Cigna denied the claim, again, based on the time period being far over to submit a claim, I got what I needed from that review process. On page three, I saw a glorious paragraph that said (bold underline is my own),


Cigna also told me that the claim review process iis sent to the doctor’s billing department as well.

Problem solved, right?

The Doctor Bills Us…Again

No. One month after this claims appeal result was sent to both me and their billing department, they glossed over this information and instead sent us another bill for the $1,097.

Things Turned Around When I Took Matters (Even Moreso) Into My Own Hands

I FINALLY found a Patient Liaison Officer within the doctor’s corporate headquarters, where you're supposed to send in issues like this that just can't be resolved with the administration in the doctor’s office branch you're going to.

So, I spent another hour or so writing them a detailed, professional letter of the exact issues going on and why they should clear my account because we clearly did not owe the $1,097. Then I sent this letter to them certified, with a receipt.

Get your copy of the exact letter I wrote to the doctor’s Patient Liaison Officer that got us out of the $1,097 medical bill + a breakdown of why it worked. Essentially, this letter was worth $1,097 to us! Plus a whole lot of sweat + tears. It’s yours, free. Not to mention I’ve got a lot of experience in writing these professional and regulations-sounding letters working at the Texas Commission on Environmental Quality for four years.

The Saga is Over

Can I just tell you how much I used to love getting the mail, and for the last six months I’ve cringed when thinking about going to the mailbox? So much so, in fact, that I only got the mail once a week.

That’s just a symptom of this whole fiasco.

I didn’t hear from the Liaison officer for a month and was afraid to ask. Finally, we were forced to make a doctor's appointment when my son fell off the bottom step at the playground and we thought he would need a stitch (thankfully, he didn’t). I took the opportunity and asked the woman at the doctor’s office to check his account and see what was going on.

She said that on July 12th, just six days after that letter was sent, they had cleared my account and attempted to call me to tell me the decision they’d reached.

I cannot TELL you the relief this gave me. And to think, I had still been cringing to go to the mailbox for the last month when I could’ve just called them to find this information out and saved myself extra stress + worry!

Learn from this + my mistakes, and get this resolution letter. You never know when you will need it.

One final piece of advice that I personally experienced: you will likely keep talking to new people each time you call your doctor’s billing department and/or your insurance company. This can be extremely frustrating, as you have to re-explain the situation + hope that the last five people included good notes within their computer system.

So it’s super important that you keep records of your conversations, the names of people that you talk with, and what they said they would do for you. Be your own advocate!

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Amanda L Grossman

Personal Finance Writer and CEO at Frugal Confessions, LLC
Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.