Hospital Sends Patient To Collections For Bill His Insurance Company Had Already Paid

We understand that hospitals often get patients using the emergency room as a “free” clinic, and that it may be less of a headache to turn unpaid bills over to a collections agency than it is to chase down debtors on your own. But hospitals shouldn’t be tossing patients to the collections lions if the patients’ insurance provider has already paid the bill.

The Newark Star-Ledger’s Bamboozled column has the story of a New Jersey man who was the victim of a screw-up by the hospital’s billing system that saw him end up in collections, pay a bill that had already been paid and still see his credit score drop by more than 100 points.

It all began back in May 2011, when the man visited the emergency room at the Robert Wood Johnson University Hospital in New Brunswick, NJ. He provided the hospital, where he had previously had an appendectomy, with his information and his insurance card from Aetna, paid his co-pay, etc., and was treated and released the same day.

Several months later, he gets a call from an agency looking to collect on what it claimed was an unpaid bill from this visit. Confused, the man called the hospital, which admitted to having the wrong insurance info and address on file for the patient. He says the hospital promised to contact the collections people to tell them to stop while the hospital sorted out the proper billing.

Meanwhile, his previously pristine credit score had sunk by 80 points.

The hospital billed Aetna and was paid accordingly, but the ding still remained on the patient’s credit report and score. And in August 2012, his credit score suddenly dropped another 57 points because the collections agency claimed he was still in arrears.

In an attempt to prevent any further damage to his credit, the man decided it would probably be best to just pay the collections folks the $378 and then sort things out. But it only got worse.

He had proof that the bill had now been paid twice, but neither the hospital nor the collections people would provide him a refund or rectify his credit report.

“I provided [the hospital] with the correct health insurance information during my visit,” he tells Bamboozled. “I’m very frustrated because this has significantly affected my bargaining power — having a lower credit score. I cannot be held responsible for any negligence in their billing process.”

After Bamboozled got involved, the picture only got slightly less muddy. A rep for the Robert Wood Johnson Medical Group contacted the patient to explain that the Group is separate from the the Robert Wood Johnson University Hospital and that it was the Group that screwed up his billing because it used info on file from his 2010 appendectomy.

“She did not offer any explanation for the breakdown in communication between the hospital and the medical group about why the latter was not given updated information from my visit,” he recalls.

The rep for the Medical Group admitted that someone had made a mistake in entering his correct information. She also confirmed that it had been paid by the collections agency and had attempted to provide the patient with a refund — but it sent the check to the incorrect address it had on file.

“[E]ven the collections agency sent the collections notice to me at my new address,” says the patient, “so I am not sure why they would send the check to the old address.”

Finally, the Medical Group has said it will provide the patient with his refund (hopefully to the correct address) and that it will remove the negative reports from his credit file.

“I spent months and months, back and forth, trying to resolve this situation and they kept telling me that nothing could be done,” he tells Bamboozled, “and as soon as the newspaper calls them, they hop on it, I guess, to avoid embarrassment.”

This is why the Consumer Financial Protection Bureau, now that it has some regulatory oversight of the collections industry, needs to add debt collections to its list of complaint portals that require these businesses to respond to consumer complaints within a given period of time.

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