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Seven steps to healthy credit

What should you do if you suddenly find that your health insurer hasn't paid claims submitted by your physician? Here's what Myvesta's Mike Kidwell suggests:

1. Read your policy: Every insurer has policies and procedures you need to be aware of to slash through the red tape in a timely manner. You may even find that you do, in fact, owe a bill. Remember, ignorance is no excuse.

2. Make contact: Your best means of resolving the situation before it hits your credit report is to get in touch with both your physician and your insurance company. Most importantly, find out how much time you have before your provider sends the matter to collections (often it triggers at 90 days). If you are quick or persuasive, you may be able to prevent this from happening. In addition, many hospitals have internal collections departments that will work with you on a payment plan and won't ding your credit report.

3. Keep records: In addition to tracking incoming bills and statements from both your physician and your insurer (often called Explanation of Benefits), take detailed notes with time and date of all conversations you have with either party.

4. Pay if you owe: If your doctor sent you a bill, even if you believe your insurer is ultimately responsible for the claim, it is better to pay it and collect from your insurer later than to let it slip into collections. "If you know you owe it, I would go ahead and pay it and then dispute it," says Kidwell. "The fact that you incurred the bill is true." One bright spot: Physicians tend to be more willing than most creditors to work out a payment schedule with you.

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5. Dispute if you were never billed: If your provider sent your account to collections without ever billing you directly, don't pay until they do. "They've got to notify you that the bill is due," says Kidwell. "Typically, your insurer would have sent you notification that they had declined the charge and you should go ahead and pay it." If your credit report gets dinged, you would have just cause to dispute it based on fact.

6. Don't "settle" the bill: If your account has gone to collections, don't offer less than the full amount to "settle;" it will be noted as such on your credit report. "Settling debts can have a negative impact on your credit," Kidwell says. "That doesn't make other (future) creditors feel too good."

7. Once dinged, pay up: Unfair as it seems, the best thing you can do for your credit report once a collection agency has reported your bill as delinquent is to pay it, then pursue reimbursement with your insurer. "If it appears on your credit report as unpaid, that's the more negative entry than the fact that it did go to collections but it's now paid," says Kidwell. "If it's in collections and you know you owe it, pay it."

Jay MacDonald is a contributing editor based in Florida.

-- Posted: Aug. 28, 2002

See Also
Dealing with a debt collector

How to fight with your health insurer

Insurance glossary
More insurance stories

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