Medical Debt Collection

For many individuals, medical debt collection becomes an economic nightmare. According to some research, debts related to medical treatment are a major reason for bankruptcy filings. Even those with health insurance may find themselves owing large bills due to an ongoing illness or health emergency. Consumers seem to have many misconceptions regarding the financial aspects of health-related issues. For example, many people may be surprised to learn that health facilities are not required to send invoices to a patient's insurance company. Of course, many facilities do so as a courtesy to their patients and to help streamline the entire billing process. But consumers are responsible for paying health-related bills, whether or not they have insurance. If the insurance company rejects a bill, the consumer is responsible for paying it to avoid being subject to medical debt collection.

Just as consumers need to be educated to correct any misconceptions, they should also educate themselves about their rights and responsibilities. Whether or not a patient has insurance, she should scrutinize the medical bills she receives. If the patient is too ill to stay on top of the bills and insurance payments, then another family member or close friend should take on this responsibility on behalf of the patient. Statements from the insurance company also need to be reviewed and matched with the appropriate bills. To avoid getting caught up in a medical debt collection process, the patient needs to pay any bills not reimbursed by the insurance company. However, the patient or advocate should understand the reasons behind an insurance company's refusal to pay certain health-related costs. Though the health bills need to be paid, the patient can dispute the insurance company's decision to reject some bills. Patients can also negotiate with hospitals to set up payment plans.

Healthcare is a volatile, political issue with some people claiming that total access to healthcare is a right and others fearing the consequences of government programs that will most likely limit access and increase costs. No simple answers exist to all the questions and concerns raised by consumer advocate groups. However, these are not new issues. The physician and historian Luke tells of Jesus' encounter with a very sick woman: "And a woman having an issue of blood twelve years, which had spent all her living upon physicians, neither could be healed of any, came behind him, and touched the border of his garment: and immediately her issue of blood stanched " (Luke 8:43-44). This poor woman had spent all her money trying to find treatment for her illness. Centuries later, people are sharply divided in how much the government should be involved in healthcare issues. The recent move by hospitals to auction overdue accounts to medical debt collection companies has raised a hue and cry by consumers. But some of their objections are based on faulty premises and ideas. The bottom line is that hospitals, even non-profit ones, still must bring in enough income to provide quality medical service. If hospitals don't receive revenue, then the doors will close and that will cause even greater disruption for local citizens.

Consumers who are struggling with health-related bills should know that medical debt collection companies must operate under the Fair Debt Collection Practices Act (FDCPA). Under the rules of this legislation, collection companies must follow certain rules about contacting debtors. For example, there are limitations on what times of the day a collector can call and restrictions on who the collector can contact about an overdue debt. Anyone who is being contacted by a creditor should research the restrictions in the FDCPA legislation. If a creditor breaks one of the rules, the debtor can file a complaint with the appropriate government agency. Several online resources include information on how best to handle creditor calls under the FDCPA and these can very useful to anyone who is being unduly bothered by collections agencies.

Under the privacy restrictions of HIPAA, only certain information can be passed along to a medical debt collection company by the creditor. This includes such basics as the individual's name and address, identifying data such as the patient's date of birth and social security number, the payment history, and the account number. Creditors can also submit payment information to the three major credit reporting agencies, namely, Equifax, Experian, and TransUnion. However, the agencies may mask the name of the creditor on an individual's credit report if the type of treatment can be deduced from the creditor's name. For example, if a person is receiving treatment at a facility with the words "muscular dystrophy" in its name, the name might not appear on the patient's credit report. This way, other companies accessing the report would not know the individual's private health issues.

A medical debt collection agency may contact someone who has not received medical treatment. Instead, this person may be a victim of identity theft. Though identity theft itself is a mushrooming problem, few people are aware of the growing problem of medical identity theft. In these fraudulent cases, an unscrupulous person manages to obtain an innocent individual's name and other identifying information, including health insurance. When the identity thief seeks medical treatment, he does so under the name of the victim and provides that person's health insurance coverage. The innocent person may not even realize he is a victim of identity theft until he is contacted by a medical debt collection agency. Resolving this problem can be difficult and time-consuming. But knowing that this can happen just provides more reason for carefully reviewing all medical bills and insurance statements for accuracy. Anything that doesn't look right should be questioned.

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