Can a hospital billing department apply your payments to prior bills?

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Can a hospital billing department apply your payments to prior bills?

My wife’s hospital bills, from having a baby, have all been inaccurate so she asked for a complete billing and payment history. She received our entire history with the hospital and discovered that I had several past due amounts clear back to 2008. I had never been notified of this. It also showed all of the payments had been made except one which we thought had been covered by the VA insurance. We were never notified the VA did not cover it. They then moved all previous payments to apply to whichever bill they wanted, including current bills resulting in 4 years of unpaid bills which were paid.

Asked on June 22, 2011 under Bankruptcy Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you owe someone money from several transactions (e.g. from several different bills or invoices; for services provided at different times; etc.), it is up to the creditor which bills to apply payments to. The creditor (the hospital, in this case) gets to decide which debts to apply your payments to; you do not get to tell them which debts they need to pay off, in which order (though sometimes, as a courtesy, a creditor will apply payments per the debtor's instructions; however, this is a voluntary curtosy, not an obligation). It is actually very common, as well as legal, for creditors to apply payments ostensibly made to newer debtrs or for newer bills to older bills, to clean up the oldest debts first.


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