Medical Law: Applying Guidelines For Collections

Medical debt is a unique type of debt that arises from a visit or interaction with a healthcare provider, such as a hospital, clinic, doctor, or nurse. It is often the result of a one-time or short-term medical expense arising from an acute medical need. Medical debt can be a significant burden, with $88 billion of outstanding medical bills currently in collections in the United States alone, affecting one in five Americans. This type of debt is also the most common collection type reported on consumer credit records, and consumers report being contacted by debt collectors about medical debt more than any other type of debt. Once medical bills enter collections, they are often reported to consumer credit reporting companies, which can negatively impact various areas of a person's life, including their ability to buy or rent a home, or find a job. Therefore, it is important to know your rights and options when it comes to medical debt collection. Both state and federal laws exist to protect consumers from abusive, deceptive, or unfair debt collection practices, and it is crucial to understand these guidelines to ensure fair treatment and resolve any disputes.

Patients' rights when dealing with medical debt collectors

Dealing with medical debt collectors can be stressful, especially when you or your family are facing a challenging health situation. It is important to know your rights and protections when dealing with debt collectors. Here are some key points to remember:

Accuracy of Bills

It is essential to check your medical bills for accuracy. Medical billing can be complex and confusing, and errors can occur. Ensure that you received the treatments listed and that the bill is addressed to you with the correct name, insurance information, and billing address. If there are any unclear items, don't hesitate to ask your medical provider for a straightforward explanation.

Debt Verification

If debt collectors contact you, you have the right to ask them to verify the debt. They should provide you with information about the collector and the specific bill they are collecting. You can also request a detailed list of charges, often called a "superbill," which outlines each medical billing procedure code, the amount paid by your insurance, and the amount you owe. This can help you identify any discrepancies or charges that you shouldn't be responsible for.

Protections under the No Surprises Act

The No Surprises Act offers protections for treatments received starting January 1, 2022. It ensures that you won't receive unexpected bills for emergency services from out-of-network providers. Additionally, if you don't have health insurance, your medical provider must give you a "good faith" estimate of the treatment cost before you receive care. If the final billed amount exceeds the estimate by $400 or more, you may be able to dispute the charges through a patient-provider dispute resolution process.

Financial Assistance Options

If you are unable to afford your medical bill, communicate with your medical care provider. Nonprofit hospitals are legally required to offer financial assistance programs, and many other providers are often willing to work out payment arrangements. Reach out to your state or local social services to explore additional support options.

Limits on Debt Collector Contact

Debt collectors can only contact you about valid debts that you owe. They cannot harass or abuse you with constant calls, and they must follow specific requirements when reporting the debt to consumer reporting companies. You have the right to ask them to stop contacting you, and if you believe they are violating your rights, you can take legal action to enforce them.

Disputing Credit Report Errors

Debt collectors are not allowed to report a medical bill to credit reporting companies without first attempting to collect the debt from you. You have the right to dispute any errors on your credit report. Be cautious of individuals or services that promise to keep medical bills off your credit report, as reputable credit counselors will be transparent about their services and fees.

Remember, you have the right to verify, dispute, negotiate, and resolve any debt, including medical debt. Don't hesitate to seek help and understand your rights when dealing with medical debt collectors.

No coercive reporting

Debt collectors are prohibited from reporting medical debt to credit reporting companies without first attempting to collect the debt from the patient. This is because debt collectors may hope that patients will simply pay the bill without disputing it. However, patients have the right to dispute the information if they believe the debt is fraudulent.

Coercive reporting can damage a person's credit score and limit their access to credit, increase the risk of bankruptcy, cause avoidance of medical care, and create difficulties in securing employment. It is important to note that even paid medical debt could previously appear on a person's credit report and negatively impact their credit score for up to seven years. However, as of July 1, 2022, paid medical debt is no longer included in credit reports.

Additionally, patients have the right to request that debt collectors verify the debt and provide information about the collector and the bill being collected. They can also take action if they believe their rights have been violated by debt collectors.

To protect patients from coercive reporting, the Consumer Financial Protection Bureau (CFPB) has started cracking down on this practice in medical debt collection. Furthermore, the Federal Trade Commission (FTC) and the CFPB enforce more than a dozen consumer financial protection laws, including the Fair Debt Collection Practices Act, which prohibits the use of threats, harassment, deception, and coercion by third-party debt collectors.

It is essential to recognize that medical debt can cause strain on patients' lives, and they have rights and protections during the collections process. Patients should be aware of their rights regarding debt validation, no coercive reporting, ways to contact debt collectors, the statute of limitations, and consumer protection laws such as the No Surprises Act.

How to avoid medical debt going to collections

Medical debt is the most common type of debt in collections, with $88 billion of outstanding medical bills currently in collections in the US alone. To avoid medical debt going to collections, there are several steps you can take.

Firstly, always ask about your charges upfront. If you don't have health insurance, request a "good faith" estimate of expected charges. When you receive your bill, check for errors such as duplicate charges and dispute them if they exist. Try to negotiate costs with the provider's billing department. If you are uninsured, find out if you qualify for financial assistance programs, which can significantly reduce your bill. If you have insurance, ensure your health plan has paid its share of the costs and that what you owe is accurate.

You can also ask the provider about a payment plan, specifically mentioning that you want to avoid the bill going to collections. If your bill has already gone to collections, contact the collection agency to work out a payment arrangement. They may offer you a settlement amount, which is better than leaving the debt unpaid, but consider all your options before accepting. Understand the statute of limitations on the debt, which refers to how long the creditor can legally attempt to collect the money owed. This can vary by state but has no bearing on how long the item appears on your credit report.

It is important to know your rights when it comes to medical debt collection. You have the right to verify, dispute, negotiate, and resolve any debt, including medical debt. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) enforce more than a dozen consumer financial protection laws nationwide, including the Fair Debt Collection Practices Act (FDCPA), which prohibits third-party debt collectors from using threats, harassment, deception, or coercion to collect payment. The FDCPA also requires debt collectors to send you a validation notice with specific information, including the name of the creditor to whom the debt is owed, an itemized report of what you owe, and information about your debt collection rights. You have 30 days to dispute the debt in writing, otherwise, the debt collector will assume it is valid.

Additionally, debt collectors must comply with certain contact restrictions. For example, they cannot call you more than seven times within seven days or call you before 8 am or after 9 pm without your permission. They can only share the details of your debt with you, your spouse, or your attorney if you have legal representation. If a debt collector violates your rights, you can take action to enforce them.

Free or reduced care for those who can't pay

Medical expenses can quickly become overwhelming, especially for those without insurance coverage. In such cases, it is important to know your rights and the options available to you. Here are some guidelines on how to manage medical bills and access free or reduced care if you are unable to pay:

Understanding Your Rights

Know your rights under the law to protect yourself from unfair or abusive debt collection practices. The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using threats, harassment, deception, or coercion to collect a debt. You have the right to verify, dispute, negotiate, and resolve any debt, including medical debt. You can request a "good faith" estimate of your medical costs in advance and dispute any charges that exceed the estimate by at least $400. Additionally, debt collectors must provide you with specific information about the debt and your rights, and they cannot continuously call you at odd hours.

Checking Your Bills for Accuracy

It is important to carefully review your medical bills for accuracy. Ensure that the treatments listed on the bill are accurate and that you actually received them. Verify that the bill has your correct name, insurance information, and billing address. If there are any discrepancies or unclear charges, contact your medical provider for a detailed explanation.

Seeking Financial Assistance

If you are unable to pay your medical bills, communicate your situation to the medical care provider. Nonprofit hospitals are legally required to offer financial assistance programs, and many other providers are often willing to work out payment arrangements. Contact your state or local social services to inquire about additional financial assistance options that may be available to you.

Understanding Debt Collection Processes

If your medical bill remains unpaid, it may be sent to a third-party debt collection agency. They will attempt to collect the debt from you and may take legal action if you do not pay. However, debt collectors must follow certain laws and cannot harass or abuse you. They must also comply with specific requirements when reporting the debt to consumer reporting companies. You have the right to ask a debt collector to verify that the debt is accurate and that you owe it.

Avoiding Medical Debt

To prevent your medical expenses from becoming overwhelming, consider the following:

• Ask about charges upfront and request a "good faith" estimate if you are uninsured.
• Regularly check your bills for errors and dispute them if necessary.
• Negotiate costs with the provider's billing department.
• Find out if you qualify for any financial assistance programs.
• Ensure your insurance plan has paid their share, and confirm that the amount you owe is accurate.
• Inquire about payment plans to avoid the bill going into collections.

By being proactive and knowing your rights, you can better manage your medical expenses and access the care you need without incurring overwhelming financial burdens.

Hospitals' billing and collection policies

Helping Patients Pay for Hospital Care

Hospitals should assist uninsured patients in identifying potential sources of public and private coverage and help them with the application process. This can include directing patients to other services that aid in enrolment.

Helping Patients Qualify for Financial Assistance

Hospitals should have a written financial assistance policy that is clear, concise, and easy to understand. This policy should outline when care may be free or discounted and detail the eligibility criteria, out-of-pocket responsibility, and application process for financial aid. Hospitals should also ensure that this information is communicated in a culturally sensitive manner and in languages commonly used in their communities.

Providing Financial Assistance to Patients

Hospitals should implement reasonable and compassionate policies for providing free or discounted care to patients with limited financial means. This includes individuals with an income below 200% of the federal poverty limit and a level of assets appropriate for the community.

Ensuring Fair Billing and Debt Collection Practices

Hospitals should employ a transparent and patient-friendly billing process. They should promptly respond to patients' queries about their bills and requests for financial assistance. Hospitals should also offer financial counselling to aid patients in understanding and managing their financial obligations.

Oversight of Third-Party Debt Collection

Hospitals should only contract with third-party debt collection agencies that comply with the Fair Debt Collection Practices Act. These agencies should meet the hospital's collection policies and legal requirements. Regular reports on debt collection efforts, including compliance attestation, should be mandated.

Protecting Patients from Certain Debt Collection Practices

Ensuring Accountability

The hospital's governing body should approve and annually review financial assistance and collection policies. Hospital leadership should continually assess their policies and practices to ensure they align with the guidelines and best serve their patients and communities.

Frequently asked questions