Debt Collectors of Medical Bills and Credit Reporting

While it may be hard to believe, most insured consumers are carrying large amounts of medical debt.  Consumers must be aware that just because they have insurance, does not mean that all of their medical expenses are going to be covered.  Besides the co-payment requirements, often times medical providers make errors in applying for your insurance benefits, and the claim gets rejected, leaving the collector to pursue the consumer directly for the bill. 

According to a recent report published by the Consumer Protection Financial Bureau (“CFPB”), the federal agency of the United States government responsible for consumer protection in the financial marketplace, almost 45 million Americans have medical debt reported on their credit files, and the majority of these debtors have no other debt reported.  That being said, it should come as no surprise that a great majority of consumers have erroneous medical debt reported on their credit file. 

If you are like the millions of American consumers receiving collection letters and harassing phone calls from collection agencies attempting to collect on medical debt, follow these tips to ensure that your account is being handled right.  First and foremost, when receiving any form of communication from a collection agency, request validation of the debt.  Under the Fair Debt Collection Practices Act (“FDCPA”), upon receipt of a request from a debtor, the collection agency must cease all collection efforts and validate the debt.  In response the collection agency must provide you with proof that the debt is actually yours.  If the collection agency is unable to provide you with the necessary information, it must discontinue all collection activities until such time as that validation is provided.

After you have confirmed that the medical debt does belong to you, find out if the statute of limitations has passed.  The statute of limitations is a specific period of time, which after it passes, a law suit can no longer be filed.  If the statute of limitations has passed on collecting medical debt in your state, you no longer need to pay the debt.   Most, if not all, medical debts are considered to be contracts.  That is, you agree with the medical facility that in exchange for their treatment of you, you will assure the bill is paid.  Thus, one would check their state’s statute of limitations for breach of contract cases.  

After you have validated the debt and are sure the debt is within the statute of limitations, you should try to negotiate a settlement.  If the debt is valid, negotiating a settlement or setting up a payment plan will allow you to pay off the debt for a lesser amount than is actually owed.   More importantly, showing them a desire to pay the bill is likely to keep the collector from filing a lawsuit to obtain their payments.  

Lastly, make sure your credit report is accurately reported and reflects your payment.  Under the Fair Credit Reporting Act (“FCRA”) you are entitled to dispute any inaccurate reporting on your credit file.  You can dispute any inaccurate information by mailing a letter or launching an online dispute.  Make sure to dispute with all three credit reporting agencies, Experian, Equifax and Trans Union, regarding the reporting of inaccurate information.  

If you believe you have medical debt on your credit file that is inaccurate and you would like to discuss the situation in greater detail, contact SmithMarco, P.C.  for a completely free case review.