University Hospital patients who have arranged to make monthly payments on outstanding medical bills may have been surprised recently by collection notices ordering them to settle their accounts.

Hospital officials say the notices were mailed by mistake and promise that they won't result in interest charges or tarnished credit scores.

"To close out the end of the fiscal year, the accounts of our patients with extended payment agreements were moved to a different area of billing. It appears notifications to these patients went out under the wrong letterhead," said Kathy Wilets, a spokeswoman at University of Utah Health Care. "The statement for next month will reflect the correction. We apologize for any inconvenience this caused our patients."

The error has been traced to 711 of 461,000 statements mailed in the past three months. The broader scope of medical billing mistakes is hard to pin down, but experts agree they're a growing problem for borrowers. And Congress may provide some relief, with advocates arguing medical debt has become a drag on the housing market.

In 2007, 28 million working Americans were sent to collections for medical debt, according to a study by the Commonwealth Fund, a health research nonprofit in Washington, D.C. And two-thirds of those with outstanding medical bills have insurance.

"For Americans with health coverage, confusion reigns supreme," said Mark Rukavina, executive director of the Boston-based Access Project at a congressional hearing in May.

Few understand their medical bills but rarely do people contact their provider for clarification, said Rukavina. "Many people mistakenly believe that unpaid medical bills have no influence over one's credit score."

One fix before Congress now is the Medical Debt Relief Act. The bipartisan bill would require credit reporting agencies to expunge medical debts of less than $2,500 within 45 days of their being settled or paid.

Currently, even small charges can mar a credit report for up to seven years and make it more expensive or impossible to get a mortgage or car loan, refinance a home or open a line of credit.

Past attempts at similar legislation have been resisted by the lending industry. But now, medical debt is hurting the scores of otherwise credit-worthy home buyers, disqualifying some from getting mortgages, Rukavina said at the May congressional hearing.

Lenders have mixed thoughts on the value of medical debt to gauge a person's likelihood of paying off a loan. Some credit evaluators disregard it because it often involves disputes with insurance companies. Others say without it, they can't get a full picture of a person's financial obligations.

Rukavina said the system now unfairly penalizes medical debtors. Patients don't get credit for bills that are paid in a timely manner, but suffer the brunt of billing disputes with insurers when unpaid bills go to collections, he said.

The U.'s hospitals and clinics recently switched to a consolidated billing system designed to help patients better understand how much their insurance paid and how much they owe.

For a complex surgery, a patient used to receive separate bills from the surgeon, hospital, anesthesiologist and lab. Now it comes as a single bill, said health sciences spokesman Christopher Nelson, noting the recent glitch was a clerical error and had nothing to do with the new system.

Wilets said the U. gives patients four notices before an outstanding bill is sent to collections. And after that, they have 30 days before the debt is reported to a credit agency, she said. "So if anyone feels like they got something by mistake, they have time to correct the problem."

Anyone with questions or concerns about their bill can call the U. at 801-587-6303 or 1-800-862-4937. Rukavina said concerned patients should also check their credit reports, which they can do free of charge at annualcreditreport.com.

kstewart@sltrib.com

Twitter: @kirstendstewart —

Confused about your medical bill?

University of Utah Health Sciences patients with questions or concerns about their bill should call 801-587-6303 or 1-800-862-4937.