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We are residents of Orlando, FL and need help with medical debt for lab test. In summary

- the test was performed in Nov 2012, and the insurer had pre-approved this out-of-network lab as in-network

- the insurer and lab went back and forth over the bill and are still going back and forth over the bill, now with my employer’s HR involved

- we never received a bill from the lab, despite us updating our address with them and USPS with our new address

- On March 17, 2015, we received notice (dated March 10) from a collection agency for a $19K debt that includes $2600 of interest

- The lab claims they cannot take it back from the collections agency

- Lab has not responded to a request for the debt amount; instead, they sent a patient ledger dated Apr 8, 2015 that shows patient responsibility of zero for every test; note, they do not have a phone

 

My questions:

- Other than a request for debt verification to the collection agency, what should I do?

- Who do I negotiate with, the lab or the collection agency?

- Does the fact the insurer is still working on it (based on contacting the employer again) have any relevance?

- Is there a risk they could damage my credit score?

 

Details:

 On March 17, we received a letter from a collection agency, claiming medical debt of $ 19k, that is inclusive of an interest amount of $2,600.

 

The lab is located in Atlanta, GA. We received their services (a series of lab tests) for our son in November 2012. I have a family health insurance plan that is self insured by my employer, which is a large corporation, and administered by a TPA insurance company. Although the lab was originally out-of-network for the insurance company, we managed to obtain pre-approval for these services to be given with in-network benefits. In fact, the lab only agreed to perform those lab tests that were preapproved. We were expecting to pay nothing more than any applicable copay, coinsurance, etc.

 

The insurance company denied many of the claims from the lab. The lab ended up filing a large number of appeals to the insurance company, but the claims remained largely denied. In January 2015, the lab turned the account over to the collection agency. The collection agency made their first communication to us on March 17.

 

Pertinently, the lab seems to have turned the account over to the collection agency without sending us any billing statement that indicated that we owed them the sum of money that the collection agency alleged.

 

After getting the letter from the collection agency, we promptly wrote them back, disputing the debt, mentioning that no statement was sent to us, and asking the collection agency to validate the debt by providing relevant documents. We are still awaiting the validation documents from the collection agency.

 

Then we contacted the lab by mail and email (they don’t accept phone calls), basically asking that we resolve the issue with them directly and not the collection agency. In reply, the lab alleged that they sent it to our address. We have a hard time believing that because we moved to a new address in June 2013 but updated both the lab with our new address and USPS. Furthermore, despite communicating them with E-mail frequently, they never replied that way (granted, billing is often handled by a third party company) or called us. The lab also mentioned that they cannot retract the account from the collection agency but can request them to not report my credit account as we work on resolving the issue.

 

Pertinently, the lab did not send us a statement indicating the debt amount even as we emailed them with a request to send it to us. Instead, they sent us an itemized patient ledger dated April 8, 2015 showing every lab test that was done, along with the cost, amount paid by insurance and patient responsibility. Interestingly, the patient ledger shows zero amount in the patient responsibility field for each of the test and does not indicate any overall patient responsibility. In short, the patient ledger does not validate the debt amount being claimed.

 

At this time, we are unable to decide in which direction to pursue the matter. What options do we have now? The collection agency has not reported to the credit bureau yet. I am willing to make a settlement for a fraction of the original debt, say up to 30% (give or take), with the collection agency. However, should I hold off because the debt may not be theres. Or should I negotiate with the lab? My fear is they already turned if over to the collection agency. And what if the insurance company does pay off the provider?

 

I would appreciate any help

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Steve Burgess is the Florida Insurance Consumer Advocate.  Call his office.  If they can't help, seek legal counsel as I suggested in my PM.

 

 

 

Consumers who have questions or need assistance with an individual insurance or financial issue, please call the Department of Financial Services, Division of Consumer Services at 1-877-My-FL-CFO (1-877-693-5236) or, if calling from outside Florida, (850) 413-3030. Visit the Division of Consumer Services on the Internet. The Division of Consumer Services has experienced staff who will enter all pertinent information into the Consumer Services Tracking system and will respond to individual concerns. The Insurance Consumer Advocate utilizes data entered into the tracking system to identify trends or business practices that may adversely impact Florida consumers. This data analysis may then result in the publication of consumer advisories and/or the development of corrective legislation.

The Office of the Florida Insurance Consumer Advocate can be reached by telephone at (850) 413-5923, or by email to Insurance Consumer Advocate.

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"My questions:

- Other than a request for debt verification to the collection agency, what should I do?  Contact the insurance commissioner for the state where your policy is from.

- Who do I negotiate with, the lab or the collection agency?  BOTH

- Does the fact the insurer is still working on it (based on contacting the employer again) have any relevance?  No.  It is a common misconception that the medical provider is required to wait for the insurance to pay.  They are not.  After 2.5 years it is not unreasonable for them to expect payment.  Especially considering they have filed multiple appeals on your behalf-

-Is there a risk they could damage my credit score?  Yes

 

"Although the lab was originally out-of-network for the insurance company, we managed to obtain pre-approval for these services to be given with in-network benefits. In fact, the lab only agreed to perform those lab tests that were preapproved. We were expecting to pay nothing more than any applicable copay, coinsurance, etc.

 

The insurance company denied many of the claims from the lab."

 

Pre-authorization is NOT a guarantee of payment.  All that really does is state that that is a procedure that is typically covered under their plans  Until the actual claims are submitted and compared against your policy there is no guarantee of payment.  

 

"After getting the letter from the collection agency, we promptly wrote them back, disputing the debt, mentioning that no statement was sent to us, and asking the collection agency to validate the debt by providing relevant documents. We are still awaiting the validation documents from the collection agency."

 

NOTHING in the FDCPA requires them to provide any documents to you as part of validation.  ALL they are required to provide is the amount they say you owe and the name/address of the creditor.  They are free to ignore your request for specific documentation and likely will continue to do so.

 

"I am willing to make a settlement for a fraction of the original debt, say up to 30% (give or take), with the collection agency. However, should I hold off because the debt may not be theres. Or should I negotiate with the lab? My fear is they already turned if over to the collection agency. And what if the insurance company does pay off the provider?"

 

Once you sent this through your insurance they are legally obligated to collect what you owe and cannot discount the amount.  It is illegal rebating.  

 

If the lab is telling you they cannot pull the account back it is because that is how their contract with the collection agency is written.  

 

If the insurance company should pay off by some miracle you would get any money over your out of pocket portion back.

 

" I have a family health insurance plan that is self insured by my employer, which is a large corporation, and administered by a TPA insurance company."

 

I suspect that this is the problem.  These self funded plans are usually a nightmare and they may have run out of money when your claim came in.  If that is the case they don't pay and you are stuck with the bills.  The big question is WHY did they deny your claim after pre-authorizing it as in network?  You have not given that necessary detail.

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I was going to ask the same question as Clydesmom.  What was the Reason given for Denial of all these claims?

 

I also wonder what the total charges were on the claims v. the allowables for the services...and wonder if the lab is attempting to collect total charges, or the allowed amounts (that insurance did not pay out on)?  That can be a huge difference, since no insurance ever pays 100% of charges.

 

I think in contracts I have seen between providers and CAs, it does stipulate that once the account has been sent to collections, you have to deal with the CA only. I tend to disagree with Clydesmom about our ability to settle with the collection agency. Typically providers have the latitude to write of some or all of patient responsibility, but on the back and and through proper channels such as a financial hardship process.  In my own experience, I have noted that when we offer a patient to fill out the form (which requires providing all kinds of personal info + bills and bank statements to back it up), the patient disappears and coughs up payment. 

 

But 19K is a LOT of money for anyone to pay out of pocket for anyone. I am still wanting to know what the insurance company gave as a reason for nonpayment of the claim...

 

If the insurance eventually pays the lab, then they will send you an Explanation of Benefits and that will show what was paid to the lab. Who is the TPA? The problem could be right there with them.

 

You mentioned that when you got the bill that you disputed the bill. But did you dispute the insurance denial itself? These are two very different kinds of disputes.

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I was going to ask the same question as Clydesmom.  What was the Reason given for Denial of all these claims?

 

I also wonder what the total charges were on the claims v. the allowables for the services...and wonder if the lab is attempting to collect total charges, or the allowed amounts (that insurance did not pay out on)?  That can be a huge difference, since no insurance ever pays 100% of charges.

From the EOB, it looked like they needed more paperwork. But the provider did file a number of appeals, I assume with sufficient paperwork. Some claims were also denied for reasons that seemed to indicate that the provider was billing the same services multiple times.  I am in the process of retrieving the reasons the insurance co. had for the repeated denials. Since the claims are old, this takes some doing (insurance companies tend to purge documents for cases that are older than a certain limit).

 

On the second point about total v. allowable charges, I believe the provider is charging me the total charges. The provider was originally out of network, but was approved for in-network benefits for some services (i.e., the ones we got) by the insurance co. I  am not sure if the provider is right in billing me the total charges instead of the allowed charges. Would like to get an opinion on this point.

 

Thanks for your advice.

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You mentioned that when you got the bill that you disputed the bill. But did you dispute the insurance denial itself? These are two very different kinds of disputes.

 There was no bill ever sent to us. The account was turned over to collections without sending us a statement (and that's a major source of annoyance because we were in the dark about the denials till the collection agency contacted us!)

 

So we disputed the collection agency's debt claim, not any bill.

 

If the collection agency does not validate the debt with a billing statement from the provider, I'll be left with no proof of anything being ever billed to me. Wonder if I have any good way of obtaining that first before even attempting to settle.

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Extremely odd no bill was ever sent to you.  Recently,  my insurance company didn't pay a ER visit in full, and I eventually received a bill from the hospital indicating what my insurance had paid and the balance that I now had that was due and payable.

 

Did you contact the FL Insurance Advocate?

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The issue is resolved. Escalated the matter to the Benefits dept. my company. Got the company HR to intervene and get the insurance company to reprocess all the claims (at 100% payment). Did not expect so much but will take this good piece of luck!

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My insurance is making payment to the provider. My provider has also agreed to retract the account from collection. They will update my account to zero patient responsibility once they receive the payment. 

Any advice on what I should do from this point onward to make sure that I do not legally owe anything to the collection dept.?

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Any advice on what I should do from this point onward to make sure that I do not legally owe anything to the collection dept.?

 

@boscodbpc

 

Request that your provider mail you a billing statement with a zero balance.  Billing statement should reflect a credit entry for the amount of the insurance payment.  Tell your provider to notify that CA that you don't owe them anymore.

 

Sign up with a credit monitoring service (such as Credit Karma) that provides you credit reports (which are free on Credit Karma), and make sure there are no negative tradelines from either the provider or the CA.

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@boscodbpc Congratulations. I think this case is a good example of the value in perseverance. Sometimes patients make the mistake of ignoring medical bills, without working assertively with the provider and/or insurance company on the front end. Then it hits collections and gets ugly.  Not sure to what extent you also relied upon the lab to process appeals, I believe the more hands on the patient is, the better outcome for all. Fortunately for you, you had an HR company to go to bat, and I love that angle -the insurance company does not want to lose the contract with the employer, especially is it is a large employer. Yeah for you!  I'm really glad that the provider is getting full payment, and the CA is cut out of their commission!

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I would want to look at the agreement you signed with the lab for payment and services.  See if anywhere in there it states that interest may be added to unpaid lab fees.  It is unusual for medical agreements to pay for service to state anything about interest.  If no interest is mentioned in the papers you signed at the time of service, then I would find a consumer attorney to sue the CA for adding $2600 of illegal interest to the alleged debt.

 

Even if the debt is fully paid and the $2600 has been extinguished, the strict liability factor of the FDCPA means that once they sent you a letter with illegal fees and interest added, they can not undo that action.  They are liable under the law for their violation and now owe you $1,000.

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