Are American Hospitals Chasing You For Bills You Thought Were Insured?

If you’re being pursued for payment of hospital services provided in the United States even though you had travel insurance, I would like to know about it. Leave me a comment below.

I have been told by Canadian travel insurers that some of their clients have been threatened by American hospitals and/or their collection agencies operating in Switzerland, Israel, Britain, and the United States with demands for extra payment even though the bills have already been paid

What happens in such cases is that insurers pay hospitals negotiated discounted rates, but when the hospitals sell or assign their accounts to collectors, they (the collectors) go after the full fees—a practice known as balance billing, which is prohibited in most contracts. Still, it’s being done.

In some cases, hospitals are simply dumping all their foreign accounts onto collectors for a fraction of their value in the belief that chasing international accounts is too expensive and time consuming to spend their strained resources on. The collectors are then free to get as much as they can and they are frightening and intimidating clients into sending cheques to drop boxes in Texas, Georgia, Florida or elsewhere, without even sending them an explanation of the services provided.

The clients then call their insurers for help, except that in many cases the insurers themselves are unaware that the accounts are in dispute. Targeting clients is a common collection tactic as they are much more vulnerable to threats.

American hospitals are now also probing the credit histories of patients they admit, even for emergency services, to see if they are financially capable of paying their bills, or if their credit history is risky. For Canadians this can be a problem because credit-rating agencies in the US and Canada share their information and are mostly owned by US companies.

Normally, Canadian travel insurance companies and their assistance representatives pay hospitals and doctors in the US directly through a network of provider contracts, and patients are rarely required to make up any differences. But in recent years American hospitals have lost billions of dollars in uncollected fees ($31.2 billion in 2006) due to the large number of uninsured and underinsured patients, and they are aggressively looking for ways to make up the shortfall. Thus, more and more US hospitals are demanding deposits on admission (usually by credit card), and they are shifting more of the responsibility for bill payments to the patients themselves in the hope they may get more than they do from insurance companies working through a system of unrealistically deep discounts.

If you are called by a hospital or collector and you had valid insurance in place at the time of service, tell them to call your insurer, not you—and then tell your insurer about it. After that, leave a comment here or send me an email so we might get a better indication how widespread this problem is.

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