If you take no action to resolve your medical debt, the bill will go into collections. Medical debt collections are incredibly common. The Consumer Financial Protection Bureau said that in 2014 more than 43 million Americans had medical debt in collections that was affecting their credit score.
Medical debt collectors must abide by specific regulations, as set forth by the Fair Debt Collection Practices Act. Collectors cannot harass or lie to debtors, or perform any other practices deemed unfair.
However, the collection process can still be quite harsh. It came to light in early 2012 that major debt collection companies had representatives working in hospitals and emergency rooms, attempting to collect payment for treatments that patients had yet to receive.
Officials believe these debt collectors regularly broke the law in a few ways. Debt collectors allegedly did not make clear that they were, in fact, debt collectors; instead, they purposely blended in with hospital staff by wearing scrubs in the emergency room. Additionally, officials believe some collectors had access to patient health records, a violation of federal privacy laws.
That, and several other complaints, helped convince the three major credit reporting bureaus (Experian, TransUnion and Equifax) to set a 180-day waiting period before including medical debt on a person’s credit report.
Medical Debt and Your Credit Score
A single medical debt in collections can harm your credit score by as much as 100 points. And once the debt appears as unpaid on your credit report, it takes up to seven years to disappear. However, the credit reporting bureaus decided in 2017 that once you pay the medical bill, it will come off your credit report.
Even with otherwise pristine credit, the unpaid medical debt can stop you from receiving the best lending options on new loans, costing you extra money in interest.
Avoid negative consequences to your credit by taking care of medical debt as soon as you receive the bill. Contact your service provider or a debt specialist with any questions and resolve the matter as quickly as possible.
Using a Medical Bill Advocate
Medical bill, or patient advocates are people who understand the medical delivery system, explain it to you and negotiate for you. If you are overwhelmed with the complexity of the system or simply don’t have time to unpack your medical bills or proposed charges, advocates can save time and probably money.
Patient advocates often focus on procedures you are contemplating or currently undergoing, while billing advocates can help you review, analyze and appeal bills.
You might have a relative with knowledge of healthcare who can help, but often advocates charge a fee. Some churches and non-profit organizations also provide advocacy assistance.
If you have already received a medical bill and need help with unmanageable costs, you might want to hire a billing advocate. If you received treatment at a hospital, ask if the institution has advocates on staff. If not, consider hiring one that you know will put your interests first.
Advocates can save you hundreds, or even thousands, of dollars. Some work for an hourly fee, others charge a percentage of the money they save you – usually 25% to 35%. Some charge less. You can find one by contacting the National Association of Healthcare Advocacy Consultants or the Alliance of Claims Assistance Professionals.