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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Context Medical 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Context (contd) SHIP enabling law, with respect to Medicare: –SHIPs shall provide assistance for the process of payment for services 42 U.S.C.1395b-3(c)(1)(C)

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Sample Collection Letters

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Sample Collection Letter-Follow up Notice

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Defending Debt when Collector is the Creditor (contd) 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)

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 May 29, 2008 ABC Pharmacy 24 Oak Street, SE Albuquerque, NM Account No 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 FDCPA Contd 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Credit Card Debt and Credit Counseling (contd) Seek assistance from a consumer credit counseling agency Consumer Credit Counseling Services (CCCS) established in 1960s 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

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 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 SHIPs assistance role? When to refer to legal counsel?

Helping SHIPs Help Medicare Consumers Health Assistance Partnership MAY 2008 Resources National Senior Citizens Law Center National Consumer Law Center* Legal Services Corporation *The NCLC materials available online were very helpful in preparing this PowerPoint presentation