How A Consumer Transaction Goes Bad, Real Bad

Portland, Oregon

This is a cautionary tale. A reminder that details count. That a consumer transaction is not over until it’s over. Life With No Fixed Address’s worst nightmare came true. Another bill, a PAID bill, fell into collection.

My nostrils flared with anger — ask MacGyver — as I read the email from our friend, who checked our snail mail in Florida.

How A Consumer Transaction Goes Bad, Real Bad

Paid receipt from Mercy Medical in Canton, Ohio mocked me as completed consumer transaction spiraled out of control threatening my credit score — again!

She had a letter from a Columbus, Ohio debt collection agency, PCB, that claimed that I owed Mercy Medical Center in Canton, Ohio $176 for treatment received May 23, 2011.

How could this be?  Yes, it’s true. I was treated there for a suspected minor infection on May 23. One of the Arts of Vagabondry is that we do not leave bills behind.

Prescription in hand, I flipped out my Platinum American Express card  (I tell you this for a reason, which I’ll explain in a minute, because it becomes an integral player) on that May Monday last year and paid immediately. I was rewarded with a $35.80 “prompt payment discount.” The following month I paid the AMEX bill in full including the Mercy Medical charge for $140.20. Case closed.

Until July. That’s when the first bill arrived informing me that my account was overdue and I owed $176. This incident is not a simple billing mistake, there are far-reaching financial consequences. A hit on a credit score — even a blemish does not disappear quickly, it takes seven years — translates into hundreds, even thousands of dollars of additional borrowing costs, maybe the inability to get certain kinds of insurance, and possibly being disqualified from a job because in America, the system is stacked against the consumer in favor of the corporation. This is no mere inconvenience.

If there’s one thing that the American medical system seems to excel at, it is billing errors, which is another reason why we paid the bill in full before departing.

According to the American Medical Association’s 2011 National Health Insurer Report Card, as reported in the New York Times May 6, 2012, commercial health insurers processed 19.3 percent of claims erroneously in 2011, up from 17.3 percent in 2010. This wasn’t a health insurer it was the hospital.

Since, I did not have my receipt last July, having paid at the hospital and then the AMEX bill and because there is only so much paper we can carry in the tractor it was sent home, I called the billing department, which fobbed me off with a promise of an investigation and that they would “get back to me.” When I asked when, they said “we’ll get back you in a couple of weeks.” I waited two weeks, no word. I called again. Again I was told that there would be an investigation and the department would get back to me. When would they get back to me, I asked. Again I was told within a couple of weeks, maybe a month.

Smarting from the Schneider National caused run in with a debt collection agency in April 2011, which did knock 100 points off my top tier credit score, and knowing if bad information is left to fester in a computer it can decay and spread, we began to worry about my credit score and debt collectors.

We were right to worry. Gerri Detweiler, a credit expert with, told the Times, “Consumers have more rights when it comes to disputing a $10 credit card charge than they do a $1,000 medical bill.”

The Fair Credit Billing Act gives consumers the right to dispute a credit card charge while withholding payment and protects the consumer’s credit report during the card issuer’s 30-day investigation period.

When a bill is sent to collections, Ms. Detweiler said, there is nothing specifically in the law to stop it from being immediately reported. While Mercy Medical said nothing would be reported while they investigated, I was not confident.

If it takes a month to investigate when they have my name, the date of treatment, the amount paid and my credit card number, we need help, so we enlisted the Platinum card. One of the perks for the huge yearly fee is that they don’t automatically blame me, the customer, when something goes wrong. They go to bat for their cardholders.

American Express launched its investigation August 1 but this was an unusual situation for AMEX. I was not disputing the payment, I wanted the hospital to recognize that I had paid, that they had billed my credit card, and to produce their records that we were square. To get Mercy Medical’s attention, the payment was disputed for one-cent to generate the inquiry.

The invoice the hospital produced for AMEX shows that it took until August 30th to sort out the problem, and apply my payment to my account .

Billing admitted the hospital applied my payment to another patient. I was promised that their billing system had been corrected, that this would not go to collection and the whole matter was closed. Until the debt collector’s letter arrived giving me 30 days to prove my innocence.

The debt collector’s letter said Mercy Medical had washed its hands of the debt — sold it to the agency — but since this was a textbook case of poor customer service by a large institution, I decided Thomas E. Cecconi, President and CEO of Mercy Medical should know. I left an irate phone message explaining my situation and informed him that I planned to do everything in my power to spread the news far and wide — even get a Twitter account, if necessary — of my experience.

A few hours later a manager of patient accounts returned the call. We walked through my facts of the case and her facts of the case including that the payment to Mercy Medical had been canceled by AMEX. Really?

AMEX’s file said that the dispute was opened August 1 for a penny, on August 22nd, it was re-opened, without an attached explanation. Mercy Medical’s letter arrived September 16 and on October 2 AMEX charged back the payment. Their notes on the file do not say why, except that they seem to indicate that the hospital’s explanation of payment charged to the wrong patient was that the charge did not belong to me. And I while I remembered the charge back, I thought it had been charged again when the matter was settled.

The bottom line? I still owed Mercy Medical money and I had probably lost my prompt payment discount.

When I contacted the hospital again, to confirm that I did owe them the money, the manager who sorted out my case extended the Prompt Payment Discount and obtained a letter from the collections agency to say that the file had been rescinded from collections and nothing was reported to the credit bureau. I paid the hospital directly with AMEX, despite their part in compounding the error because they acted on my behalf.

So a huge mistake by Mercy Medical, which happened when they swiped my credit card on May 23, which escalated by slow handling of my file, is over almost a year to the day after it started. I am thankful that the hospital responded to my phone call, but this is a serious situation, one Congress needs to address.

Big business particularly is thrilled with computers that mechanize everything, in many cases, by reducing employees. But for consumers, computers can be a very bad thing. Once wrong information is embedded into a computer, it is difficult to isolate and can be almost impossible to eliminate.

We don’t volunteer for medical debt, there is a proven poor track record in recordkeeping in the medical industry, consumers need the same rights and protections as credit cardholders.

I suspect this little mistake by Mercy Medical is going to haunt me for some time.

What did we learn from this? Transactions with large institutions, medical, insurance and banking need extra care in recordkeeping. We must scan more receipts. This, to quote my mother, is simple but not easy. We have no desk in the tractor, no area to leave for paperwork. We scan our log pages and it is an operation each time to set up. Credit card bills must be checked thoroughly every month at payment.

And you thought this was the end of the story. Me too! Until another bill arrived from Mercy Medical, this one dated May 1, 2012 the day before I paid the invoice for the second time!

But why did I get a bill from the hospital? The account, I was told in a letter dated April 18 from debt collector PCB, was that they were in control of this file and not to respond to the hospital.

I emailed the Patient Accounts Manager and she said that I had a paid receipt that should finish the matter. No, unfortunately it does not. As long as this account is rolling around in the hospital billing system I have a problem. It has not been expunged. Even though it wa supposedly sent to a debt collector it is still an active bill at the hospital for the original $176. I am following up. I need proof it is finally settled.

This will definitely haunt me. I will pull my credit bureau files again at more cost to me.

The Shit Just Never Ends.

2 thoughts on “How A Consumer Transaction Goes Bad, Real Bad

  1. What really bugs me is that my hospital turns unpaid accounts over to a collection agency and the reason they are unpaid is due to bookkeeping error(s) on the hospital's part. In my case they forget to write-off certain amounts that they are supposed to write off according to their agreement(s) with Medicare and other insurance carriers.I think that the insurance companies have made this so complicated that even if a health care provider has competent help it is almost impossible for them not to make mistakes.One of the benefits of being old and retired is I don't worry about my credit score these days.Good luck


  2. Still, it's not right. It still sucks up your time to deal with it. I hope the collection agencies are not harassing you. It shakes my confidence in the quality of care of an institution if the billing department is so poor.


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