Laws for adding late fees on medical bills and other account types vary by state. Some states require the doctor or other service provider to disclose their terms up front, including any possible late payment penalties, and get your agreement before providing services. Medical bills may also be subject to interest, although the allowable rate varies depending on where you live.
Doctors and other medical service providers usually do not report their accounts to the Experian, TransUnion and Equifax credit bureaus, even if you are seriously delinquent. Be warned, though: They may turn bad debts over to collection agencies, which do report to the bureaus, Bankrate writer Jay MacDonald says. A late medical account that is in collections hurts your credit score, whether or not it has added fees, since payments make up more than one-third of your score.
You may be able to negotiate a payment plan with medical providers as an alternative to neglecting high bills and racking up late payment fees. Offer to pay a monthly amount until the entire balance is paid off. Ask for a waiver of interest and fees, Families USA advises, and ask the doctor or other account holder not to send your account to a collection agency as long as you send in your payments as agreed. This stipulation protects your credit report from damage. Request monthly statements that show your payments and balance so you can easily ensure that you are not being charged any extra fees. Do not pay medical bills with a credit card if you cannot afford the card's minimum monthly payment. You may avoid late fees on the medical accounts, but your card issuer can impose its own penalties, including fees and higher interest.
Prioritize your debts so you do not neglect more important bills with severe non-payment consequences while paying your medical bills, Families USA warns. For example, it may be wiser to let a medical bill go delinquent, even if you are legally liable for late fees on the account, and pay your mortgage and car note instead. House payments and vehicle loans often have higher late payment penalties, and the lenders can foreclose on your home or repossess your vehicle if you default, as compared to a potential lawsuit by a medical creditor.