$7300 medical billing error reported to credit agencies

Question

I opened up a Credit Karma account and noticed a collection in the amount of $7368. It was originated from Eisenhower Medical center. So I called Eisenhower to inquire and after 45 minutes on the phone, Eisenhower billing department had stated she didn't know how they could have made such a mistake.

Apparently the billing department was trying to authorize a surgery my son in December of 2015, in my name. Now my son already had pre-authorizations for the surgery. Billing was trying to bill the claim in my name so it wasn't authorized. The lady that helped me apologized profusely but the damage has already been done to my credit.

She said it would take up to 30 days to take off my credit. My question is what more can I do to ensure this doesn't happen again. Shouldn't the hospital be penalized for ruining my credit over this 7 month period. I never received bills from them for the outstanding balance and don't think this is fair.

Answer 1

My question is what more can I do to ensure this doesn't happen again.

Credit monitoring services can be helpful at detecting things like this early, but they can't actually prevent them, clerical errors will persist.

Shouldn't the hospital be penalized for ruining my credit over this 7 month period. I never received bills from them for the outstanding balance and don't think this is fair.

Did your temporary poor credit cause any harm? There have been a number of judgments against companies that have wrongfully damaged an individual's credit score. If you were denied a loan, or stuck with a higher interest rate due to this error, then you might have a pretty strong case against the hospital. There are even cases where just the loss of credit was deemed enough to warrant compensation, but I'd imagine they are less likely to be won.

I'm guessing it's not worth pursuing compensation unless you had some situation in the last 7 months that clearly cost you more due to your credit score, but that's for you to decide.

Answer 2

The hospital has done what they can do in terms of repairing the damage; 30 days is reasonable given reporting frequency. No permanent harm has been done in terms of your credit. Further, since this is a medical collection, it didn't do a whole lot of damage in the first place; many credit scoring algorithms do not consider medical collections at all or nearly as much as they would consider non-medical collections, as they are not particularly predictive of future performance.

As far as penalties; probably not, as this seems like it was an honest mistake on their part. If you didn't apply for credit during this time, no real harm has been done. If you did apply for credit, were turned down, and suffered some specific harm as a result (such as lost a deposit on a house), you could consider suing in small-claims court for that specific harm.

Answer 3

Unfortunately, the only thing you can do to ensure that this doesn't happen again is to go over all paperwork and ask the clarification questions at the time it happens. Meaning, if your son has to have surgery again, go over the paperwork with the billing department to ensure that everything is correct.

The good thing is that the hospital has acknowledged that the error is on their part and they will write to the credit bureaus to correct the error - either update or delete. This will then reverse any damages and negative impact related to that particular account and only that account for this particular incident

The Federal Trade Commission has more information on disputing and correcting errors on credit reports.

Answer 4

What's not "fair"? You contacted the hospital. They admitted to a mistake, and it's going to be remove from your credit report, as you have asked. The hospital is not the credit bureau, and they don't govern the policy by which incorrect information is removed. If you want it done faster, you've got about a ton of red tape toward getting legislation passed to change the policies of the Federal Trade Commission, which is the policy-maker here in the U.S.

Let's think this through. Would it be fair to penalize businesses, or people, for every time they've ever made a mistake? Have you never made a mistake? In a court of law, you can sue for so-called punitive damages but genuine mistakes (lacking malicious intent) don't really apply. You could sue for damages, but you'd have to show actual, material consequences of their mistake. I'm not a lawyer, but it doesn't seem you'd have much to go by.

That said, if the hospital's done as they should, the entry should drop off within 30 days, and you can go on like this whole thing never happened. As far as the future is concerned - stuff happens! Live your life one day at a time.