Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Pinch Hitting Helping Beneficiaries with Billing Issues Ellen Leitzer Mike

Helping SHIPs Help Medicare Consumers

Health Assistance Partnership MAY 2008

Pinch Hitting

Helping Beneficiaries with Billing Issues

Ellen Leitzer

Mike Klug



Workshop Goal

• Provide participants with basic knowledge of

– medical billing issues– rights of debtors and creditors– best practices in resolving billing issues– role of SHIPs in assisting with medical billing

issues– resources to assist low income debtors



Glossary of Terms• Debtor – an individual or business that has failed to

pay money owed to another

• Creditor – an individual or business owed money by another

• Credit Collection Agency – a third party business entity that collects debts owed to a creditor

• Medical Debt – money owed to a provider of health care services



ContextMedical debt problems handled by SHIPs:

• Non-payment of Medicare Advantage or Prescription Drug Plan premiums

• Erroneous billing for duals• Hospital billing problems• Ambulance billing problems • Advance Beneficiary Notice (ABN) billing

problems



Context (cont’d)

• SHIP enabling law, with respect to Medicare:

– SHIPs shall provide assistance for the process of payment for services42 U.S.C.1395b-3(c)(1)(C)



Debt Collection by Creditor or Collection Agency

• Advise client to:– Keep copies of all written communications– Take notes on all oral/telephone

communications– Note any harassing or foul language used

by caller



Sample Collection Letters



Sample Collection Letter-Follow up Notice



Defending Debt when Collector is the Creditor

• Do not ignore bills• If appropriate, request a Suspension of

Collection Efforts pending appeal of the incurred charges

• Seek payment solutions through public funding



Defending Debt when Collector is the Creditor

(cont’d)

• Seek payment solutions through private funding

• Negotiation and lump sum payment• If client is “Judgment Proof,” then he/she

should send a Judgment Proof letter to the creditor (see next slide)



May 29, 2008

ABC Pharmacy24 Oak Street, SEAlbuquerque, NM 87108

Account No. 12345

Dear Sir:

This letter is to advise you that, unfortunately, I am unable to make payments on the above-referenced account with you and that I am “judgment proof” under the laws of New Mexico.

I am a senior citizen whose only source of income is from Social Security and a small pension. I have no assets of value, do not own a home, and drive a twelve year old automobile. Moreover, I do not plan to file for bankruptcy.

Please do not call me about my account with you. Again, I deeply regret my inability to make payments on my account.

Sincerely,Mary Smith



Defending Debt when Collector is Collection Agency

• Do not ignore collection efforts otherwise client will end up in court!

• Debtor protections against collection agency harassment



Federal Fair Debt Collection Practice Act (FDCPA)

• Prohibits all forms of unfair, abusive, and deceptive collection practices

• Prohibits collection of debts not owed, time barred, or discharged

• Credit collection agency must provide debtor with notice of his/her right to challenge debt within five days of sending notice



FDCPA Cont’d

• Debtor has the right to demand that credit collection agency cease contacting debtor

• Debtor has the right to require credit collection agency to “validate” the debt



State Law Protections• Most states have state fair debt collection laws

similar to the federal law• These laws protect consumers from harassment by

credit collection agencies and creditors (including hospitals and other medical providers)

• States unfair or deceptive acts or practices (UDAP) laws also provide broad protections against a wide range of abusive behavior by debt collectors

• Special exemptions for medical debt exist in a very few states and protect consumers facing medical debt collection



Credit Card Debt and Credit Counseling

• Many seniors charge necessities to their credit cards• The average credit card debt of Americans over 65

increased by 89% between 1992 and 2004 from $2,143 to $4,907

• Medical debt for all ages accounts for one-half of all bankruptcies

• Monthly minimum credit card payments rarely reduce the principal amount owed

• Negotiation and lump sum settlement



Credit Card Debt and Credit Counseling (cont’d)

• Seek assistance from a consumer credit counseling agency

• Consumer Credit Counseling Services (CCCS) established in 1960’s by credit card industry– Now many credit counseling services are unscrupulous and

predatory

• Before referring a client to a CCCS, check with your local legal services program to ensure a referral to an appropriate agency



Role of SHIP in Troubleshooting Medical Debt Problems

• SHIP enabling law, with respect to Medicare:

• SHIPs shall provide assistance for the process of payment for services

• What is the scope of SHIP’s assistance role?

• When to refer to legal counsel?



Resources• National Senior Citizens’ Law Centerwww.nsclc.org

• National Consumer Law Center*www.nclc.org

• Legal Services Corporationwww.lsc.gov

*The NCLC materials available online were very helpful in preparing this PowerPoint presentation

Documents

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Pinch Hitting Helping Beneficiaries with Billing Issues Ellen Leitzer Mike