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Finding the Best Way to Pay

Special Problem: Medical Bills
One of the most challenging aspects of paper management for my clients is keeping track of medical bills. Often we don't pay a medical bill right away because we're waiting to see what the insurance company is going to do about it or we're not able to pay the entire amount all at once.

This is when the March of the Duplicates begins. It reminds me of a child asking for something: "Can I have it now?...How 'bout now?...Okay, now?...What about now?" Anyone to whom you owe money is likely to remind you about it, but it seems that medical billers are the most frequent.

Chaos ensues when you already have a paper-management problem and you end up with multiple bills for the same service. You might pay part of one of them and even write a note to yourself on the bill and then find another copy of it the next day and wonder whether you imagined what you did the day before!

Don't wreck your health worrying about medical bills; use your new system to keep them organized. Here's the key to solving this problem before it begins:

  1. Whenever you have a medical event, start a folder. Label it with the date, what happened, and where you went for treatment.
  2. When documents begin marching into your mailbox regarding this event, escort them straight into the folder. Add a subfolder for each biller that contacts you, so you end up with, for example, a main folder called Broken Leg, 5-23-04, General Hosp. with subfolders labeled Hospital Bill, Lab Bill, X-rays, and Specialist.
  3. When you receive a duplicate of a bill you already have, staple them together and file them in the correct subfolder. Don't just throw away the older bill and keep the newest copy – you might need to refer to that first one for the original bill date, and newer versions of the bill might contain updated insurance payment information. Sometimes the treatment codes and prices even change mysteriously; you'll want to know that. You might eventually end up with a thick packet of different iterations of the same bill; this is okay.
  4. Add another subfolder labeled Explanation of Benefits for the statements you'll begin receiving from your insurance company. It would be nice if they would send one EOB per biller, per event, so you could just file each EOB in the appropriate biller's folder, but they usually don't.
  5. Create a document similar to the one in Figure 3.2 to keep track of where you stand with each bill. You can make notes on this tracking document or on separate sheets. If you have to call about one of the bills, write your notes on any scrap paper during the call; when you hang up, add the date and the name of the person(s) you were talking to and file it in the subfolder for that bill.
  6. When the event is finally resolved and paid for, file the entire folder. You should hold onto records like these for a few years, until you're very sure that everyone was paid and your insurance company isn't going to come back to you for more information.
If you think this seems like overkill, you must have great insurance!

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More on: Family Finances

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Reproduced from Organize Your Personal Finances in No Time, by Debbie Stanley, by permission of Pearson Education. Copyright © 2005 by Que Publishing. Please visit Amazon to order your own copy.


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