Medical Debt and Workers’ Compensation
A new federal rule prohibits the inclusion of most medical debt on most credit scores. A longstanding worker’s compensation rule provides similar protection to job injury victims.
According to the Consumer Finance Protection Bureau, an unpaid medical bill on a person’s credit report is a poor predictor of a consumer’s likelihood to repay a loan, and contributes to thousands of denied applications on mortgages that consumers would be able to repay. The CFPB expects the rule will lead to the approval of approximately 22,000 additional, affordable mortgages every year and that Americans with medical debt on their credit reports could see their credit scores rise by an average of twenty points.
“People who get sick shouldn’t have their financial future upended,” said CFPB Director Rohit Chopra. “The CFPB’s final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.”
The Background
Workers’ compensation pays all reasonably necessary medical bills pertaining to a job-related injury or illness. These medical bills include:
- Ambulance, medevac, or other transportation costs,
- Emergency triage, evaluation, and care,
- Hospitalization and surgery,
- Follow-up medical care,
- Physical or occupational therapy, and
- Medical devices, prescription drugs, and other ancillary medical expenses.
An illness or injury is covered if it’s substantially caused by a work-related condition. Assume Ben has a bad knee due to a high school football injury. When he falls at work, he tears a ligament in the knee. This injury requires extensive surgery as well as extended recovery. Furthermore, it permanently limits his mobility.
A Tampa workers’ compensation lawyer can obtain medical bill coverage if the work-related fall aggravated the bad knee, as opposed to the other way around. These medical nuances are difficult to prove in Florida, underscoring the need for a very good lawyer.
The Problem
Most people know how the insurance/private pay system works. People who pay out of pocket usually pay much more for the same service than an insurance company.
Let’s stick with Ben and his bad knee. When he gets to the hospital and a medical team preps him for surgery, an anesthesiologist runs up a $5,000 bill. The doctor has a deal with the workers’ compensation insurance company which reduces the payment to $1,000.
After the insurance company pays its $1,000 bill, the anesthesiologist sends a $4,000 bill to Ben, to collect the total amount for the service. Sometimes, this double billing is purely accidental. Many doctors have separate billing entities that know nothing about workers’ compensation laws.
Accidental or not, the outcome is the same. Ben gets a $4,000 bill he probably cannot pay, probably because his severe knee injury forces him to miss work. The lost wage replacement benefit comes into play in these situations, but that’s the subject of a different blog.
The Solution
The problem is complex, but the solution is quite simple. Ben’s Tampa workers’ compensation lawyer advocates for him, using the Florida Consumer Collection Practices Act.
The FCCPA is Florida’s version of the U.S. Fair Debt Collection Practices Act. It prohibits many of the same kinds of annoying, harassing and deceptive conduct that is outlawed by the federal law. However, the Florida law is different in a couple of significant ways.
Most importantly, the FCCPA applies to activities by the original creditor, not just collection agencies. If the hospital, pharmacy, lab, or healthcare provider is the one sending you bills and contacting you in ways that violate the law, you can pursue a claim directly against the first party provider. Additionally, the FCCPA authorizes punitive damages when the practices used against you were malicious.
Work With a Thorough Hillsborough County Lawyer
Injury victims are entitled to important financial benefits. For a confidential consultation with an experienced workers’ compensation lawyer in Tampa, contact Kobal Law. After-hours visits are available.
Source:
consumerfinance.gov/about-us/newsroom/cfpb-finalizes-rule-to-remove-medical-bills-from-credit-reports/
