Medical Debt Collections

Many patients are concerned that an unpaid medical bill will be “sent to collections” by a provider.  A billing account being sent to collections means the provider will use a third party (collections agency) to collect from a patient, rather than the provider, itself, trying to collect.  In some cases, a collections agency may be a separate division of the provider’s own organization.  Many providers, especially hospitals, use collections agencies because they specialize in debt collections, and can perform the service more successfully or at a lower cost than can the providers.


Having a medical bill debt sent to collections may mean the patient will be contacted more frequently and in new ways (e.g. phone and email).  In this regard, a patient may feel more annoyed if a collections agency is pursuing payment of a medical bill compared to a provider doing so.  However, whether a collections agency is any more annoying than a provider depends on the specific agency and provider.

It is important to understand what having a medical bill debt sent to collections does not include. Sending to collections:

 

  • Is not a legal action (lawsuit) or judgement that the patient owes the debt.
  • Does not mean the patient owes the debt any more than before the debt is sent to collections.
  • Does not negate or make your dispute of the medical bill any less valid.
  • Does not cause patients to give up any legal protections or concerns related to the medical bill.

 

Consumer Protections

There are many protections at federal and state levels for persons with any form of debt, and for patients and others with medical debt specifically.


Federal - Fair Debt Collection Practices Act

The federal Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to collect debts, including:

  • Misrepresenting the nature of the debt, including the amount owed
  • Falsely claiming that the person contacting you is an attorney
  • Threatening to have you arrested
  • Threatening to do things that can’t legally be done or threatening to do things that the debt collector has no intention of doing.


Examples of unfair practices

Here are a few examples of what the FDCPA would consider a prohibited practice used to collect on a debt. Debt collectors are not allowed to:

  • Try to collect charges in addition to the debt unless they are allowed by the contract or law
  • Communicate or attempt to communicate with you in connection with the collection of a debt through a social media platform if the communication or attempt to communicate is viewable by the general public or the person’s social media contacts
  • Communicate with you by sending an email that the debt collector knows is provided to you by your employer, unless an exception applies
  • Use any language or symbol on an envelope for correspondence with you that indicates it is a debt collector, other than the debt collector’s address or business name that doesn’t indicate it’s in the debt collection business

 

Examples of false or deceptive statements

Debt collectors are not allowed to falsely claim or imply that:

  • They are attorneys or government representatives
  • You have committed a crime by not paying a debt
  • They operate or work for a credit reporting company
  • You will be arrested or imprisoned if you don’t pay
  • They will garnish or seize your wages, bank account, or property
  • Documents that they send you are legal documents if they aren’t

 

Examples of harassment by a debt collector

A debt collector is also not allowed to harass, oppress, or abuse you or anyone else they contact. This includes repetitious phone calls with the intent to harass, use of obscene or profane language, and threats of violence or harm.

 


Frequently Asked Questions on Debt Collection

How are debt collectors allowed to contact me?

Debt collectors can call you, contact you by private message on social media, or send letters, emails, or text messages to collect a debt.

 

What does the debt collector have to tell me about the debt?

A collector has to give you “validation information” about the debt either when they first communicate with you or within five days of the first contact. The collector has to include the following

  • their name and mailing address
  • the name of the creditor you owe it to
  • how much money you owe, written out to include interest, fees, payments, and credits
  • what to do if you don’t think it’s your debt
  • your debt collection rights, including your right to get information about the original creditor if you ask for it within 30 days of getting validation information from the collector

 

How do I stop a debt collector from contacting me?

Mail a letter to the collection company and ask it to stop contacting you. Keep a copy for yourself. Consider sending the letter by certified mail and paying for a “return receipt.” That way, you’ll have a record the collector got it.

 

Once the collection company gets your letter, it can only contact you to confirm it will stop contacting you in the future or to tell you it plans to take a specific action, like filing a lawsuit. If an attorney is representing you, tell the collector. The collector must communicate with your attorney, not you, unless the attorney doesn’t respond to the collector’s communications within a reasonable time.

 

But consider talking to the collector at least once, especially if you don’t think you owe the debt or can’t repay it immediately. That way, you might be able to confirm whether it’s really yours or find out more about the amount owed. To avoid debt collection scammers, don’t share your personal or financial information until you’ve gotten validation information or are already familiar with the collector.

 

Customers can use Patient Fairness’s tools to issue a letter requesting not to be contacted.

 

What if I don't think I owe the debt?

Once you get the validation information, if you still don’t recognize a debt, or don’t think the debt is yours, send the debt collector a dispute letter. Say you don’t owe some or all of the money, and ask for verification of the debt.

 

Make sure to send the dispute letter within 30 days. Once the collection company gets the letter, it must stop trying to collect the debt until it sends you written verification of the debt, like a copy of the original bill for the amount you owe. Consider sending your letter by certified mail and requesting a return receipt to show that the collector got it. Keep a copy of the letter for your records.

 

If you don’t dispute the debt within 30 days of getting the validation information, the debt collector will assume the debt is legitimate.

 

Customers can use Patient Fairness’s tools to dispute the debt with a collections firm.

 

Can a debt collector report my debt to a credit reporting company?

Yes, but a debt collector must take one of the following actions before reporting a debt to a credit reporting company

  • talk to you by phone or in person about the debt
  • mail a letter or send an electronic communication about the debt, such as a validation notice, and wait for a reasonable amount of time, usually 14 days, in case it’s returned as undeliverable

 

What states limit or ban medical debt reporting?

These 15 states have medical debt credit reporting restrictions and rules.

California Colorado Connecticut
Delaware Illinois Maryland
Maine Minnesota New Jersey
New York Oregon Rhode Island
Virginia Vermont Washington

These FAQs are from the Federal Trade Commission website’s Consumer Advice pages. You will find additional information here.

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