The Dirty Tricks of Hospital Billing

If you have to visit a hospital, be careful with sketchy hospital billing tactics especially if they have access to your credit card or debit card. Let’s review how to avoid paying for a hospital bill or medical bill that you never approved.

Updated on February 4, 2025.

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Key Points:

• Medical bills are one of the top reasons people file for bankruptcy.
• Giving the hospital your credit or debit card could result in getting billed on the spot.

Why People File for Bankruptcy

I’ve learned from practicing bankruptcy law for over two decades that the general public doesn’t understand why people file for bankruptcy.

One of the main reasons people file for bankruptcy is because of medical bills and loss of income due to health-related reasons. Even with health insurance, it’s usually not enough because of copayments, uncovered medical prescriptions, and deductibles.

As a result, hospitals sometimes resort to tactics that are nothing short of fraudulent, which is why you need to be aware of this.

Hard to Believe, But Everyone Can’t Be Lying

If one person tells you a story that sounds somewhat outlandish, you take that story with a grain of salt. But what about if two or three more people tell you the same story? What if, after several years, you have heard the same story dozens of times? Then, you start to believe that the story is true.

I have come across clients who told me that they didn’t realize when hospital staff asked for their driver’s license and credit or debit card to prove their identity that they were being billed.

If you have ever had an overnight stay in the hospital, you know there is that person from the insurance or finance department who charmingly introduces themselves but makes clear that the bills need to get paid.

Hospitals, like any other business, need revenue to keep the lights on, which is part of the problem with our healthcare system.

For example, I’ve had many clients involved in motorcycle accidents where a few overnight stays are likely, yet before I get to the hospital, my client has already been discharged. Why? Because they did not have insurance.

The opposite extreme was when my father was ill, and because he had dementia, he was always requesting to be taken to the hospital. The problem is that I witnessed multiple times where an overnight stay was unnecessary, yet he was kept there for several days. But when Medicare is paying for the hospital bill, there’s no rush to send him home.

Paying Medical Bills

Imagine checking yourself into a hospital. The worries and the stress, and you are asked to prove your identity with a driver’s license and a credit card or debit card. You comply, only to find out later that the hospital maxed out your credit card or withdrew all the funds from your checking account. You can imagine how this can financially turn someone’s life upside down within minutes.

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This means that someone with no intentions of filing for bankruptcy and a low balance on their credit card finds themselves drowning in debt because of hospital bills due to some shady actions by the hospital. Of course, if the money is withdrawn from a checking account, it is even worse because there’s no access to cash.

Of course, you could dispute the charge with the credit card company, but you were at the hospital and received their services, and they are allowed to charge for their services.

Besides, have you ever dealt with a credit card dispute? If the creditor contests it, I can tell you the process is never short, sweet, or simple. The last time I went through a credit card dispute, it took almost one year to resolve for a $200 refund. Imagine if you are disputing tens of thousands of dollars.

It won’t surprise me at that point if you start getting aggressive letters sent to you by the hospital billing department or, even worse, their debt collection attorney.

Spread the Word About Hospital Billing Practices

I wrote this blog to make more people aware of this issue. Tell your friends and family about this blog post because I will tell you that I’ve always been bothered by the fact that an illness could lead to bankruptcy.

Think about it: if you got into debt because of reckless spending, everyone would agree that filing for bankruptcy is the consequence, but getting ill is something you have no control over. No one wants to get sick. So, it’s even less fair when someone suffers from a disease and has to file bankruptcy multiple times in their life because of it.

• Protect Your Bank Account from Creditors!

Now, go back to the coronavirus pandemic. During that time, the federal government was paying hospital bills related to COVID-19. But who is paying the rent or mortgage after recovering in the hospital for several weeks? Debt!

Whether it was credit cards, personal loans, or even an SBA loan, debt most likely financed a loss of income during that period, which is why I continue to argue that bankruptcy filings have increased because the statute of limitations on that debt is running out.

You’ve Been Warned About Medical Bills

If you face this situation, you now know what could happen. Hospitals, in reality, only need your identification and proof of health insurance. Nothing more, nothing less.

Trust me when I tell you my wife has checked herself into urgent care several times, and I’ve made it clear to her to leave her debit card and credit card in the car. Her driver’s license and health insurance card are sufficient.

Remember the old saying: caveat emptor. Buyer beware.

I wish you the best of luck on your financial journey, and more importantly, I wish you wealth and excellent health.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. For paralegals and students buying single copies, you can do so via Amazon books. To access my YouTube channel, click this link.

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Please note the information on this site does not constitute legal advice and should be considered for informational purposes only.