What Happens if Your Card Declines at a Hospital?

When a payment card declines at a hospital, established procedures are in place to guide patients through the financial aspects of their medical care. Understanding these processes and available options can alleviate concern. This article explains the typical sequence of events following a declined payment and outlines the resources and actions available to patients.

Immediate Hospital Response to Declined Payment

The Emergency Medical Treatment and Labor Act (EMTALA) mandates that any individual presenting to an emergency department must receive a medical screening examination to determine if an emergency medical condition exists. Hospitals cannot delay this examination or necessary stabilizing treatment to inquire about a patient’s method of payment or insurance coverage. This ensures that immediate medical needs are addressed without financial barriers at the point of care.

Once a patient’s emergency medical condition is stabilized, or if their visit is for non-emergency services, the hospital’s approach shifts to financial discussions. Staff from registration or billing departments will request an alternative payment method if a card declines. They may also verify insurance information or initiate a discussion about financial options available through the hospital. The focus remains on ensuring continuous care while beginning the process of financial resolution.

Hospitals are prohibited from demanding immediate payment for services covered by EMTALA before those services are rendered. Payment requests are made after a medical screening examination, stabilization of an emergency condition, or admission. This protocol safeguards patients from being denied essential care due to an inability to pay upfront.

Hospital Billing and Financial Assistance Processes

After receiving medical care, patients will receive a bill from the hospital, often after insurance processing is complete. This initial bill arrives within 30 to 60 days following the service date. The statement should detail the services rendered, the charges for each, and any amounts covered by insurance, indicating the remaining patient responsibility.

Hospitals are required to offer financial assistance programs, or charity care, to maintain their tax-exempt status. These programs provide free or discounted care to eligible patients who are unable to afford their medical expenses. Eligibility criteria for charity care are based on a patient’s household income relative to the Federal Poverty Level (FPL), often with tiers for free versus discounted care.

Hospitals must publicize their financial assistance policies, making them available on their websites and in public areas within the facility. They are also required to provide a plain language summary of their policy during patient intake or discharge. These policies outline the application requirements and the documentation needed to determine eligibility. Many hospitals also offer structured payment plans, allowing patients to pay their balances over an extended period, typically without interest.

Patient Steps for Resolving Medical Bills

Upon receiving a medical bill, a first step is to request an itemized statement from the hospital’s billing department. Patients have the right to receive a clear, itemized bill detailing each service, supply, and charge. This comprehensive breakdown allows patients to review all charges for accuracy, as billing errors are not uncommon. Comparing this itemized bill with an Explanation of Benefits (EOB) from an insurance provider can help identify discrepancies.

If the bill appears correct but presents a financial hardship, patients can engage with the hospital’s financial assistance department. Hospitals have financial counselors available to explain their programs and assist with the application process. Patients should gather necessary documentation and submit a formal application for financial aid. Non-profit hospitals are required to give patients a period to apply for financial assistance.

Negotiating a payment plan is another step if financial assistance is not applicable or insufficient. Patients can contact the billing department to propose a monthly payment amount that aligns with their budget. Hospitals are willing to work with patients to establish interest-free payment arrangements over several months or even years. Sometimes, hospitals may accept a lower lump-sum payment if a patient can pay a substantial portion of the bill upfront. For complex issues, patient advocates or non-profit organizations can provide guidance and assistance in navigating billing disputes and financial aid applications.

Understanding Medical Debt and Credit Impact

Unresolved medical debt can have financial implications, though recent changes in credit reporting offer protections. While medical bills historically impacted credit scores quickly, a one-year grace period now exists before medical debt appears on a credit report after being sent to collections.

Medical bills go to a collections agency after 90 to 180 days of non-payment, depending on the healthcare provider’s policies. Even if a bill enters collections, rules govern its impact on credit. As of July 2022, paid medical collections are removed from credit reports. Since April 2023, medical collections with an initial reported balance under $500 are no longer included on credit reports.

Despite these changes, a recent federal court ruling reversed a Consumer Financial Protection Bureau (CFPB) rule that would have banned medical bills from credit reports. Unpaid medical debt can still appear on credit reports and affect credit scores for up to seven years. While medical debt is often treated differently from other types of consumer debt in credit scoring models, it can still influence a person’s ability to secure loans, housing, or employment opportunities.