How to Handle a Medical Debt Collector


In This Piece

Are you struggling with medical debt? Are you tired of medical collectors calling? If so, you’re not alone. Studies show that Americans owe more than $88 million in medical debt. Reports also show that 20% of American households claim to have past-due medical bills.  

Fortunately, the government has made changes in some of the rules regarding medical debt. Understanding your rights and how to deal with medical debt collectors can help reduce the number of unwanted calls you receive.  

No matter how big or small your medical debt is, it can impact your finances. Here are tips for how to deal with debt collectors for medical bills.

Gather Information

When a medical collector contacts you, your first instinct may be to pay the debt. Don’t make this mistake. These collection agencies handle hundreds of thousands of claims. Mistakes happen. There are also a lot of scam agencies that are not authorized to collect medical debt.

You don’t want to pay a debt that isn’t yours or pay the wrong agency. To prevent this from happening, do some research.

Start by researching the collection agency. Make sure the agency can legally work in your state. Most states require debt collection agencies to obtain a license. Ask the medical debt collector for their information, including their name, name of agency, street address, company phone number and license number.

You can then contact your state agency to make sure this information is correct. It’s also not a bad idea to contact the collection agency directly to make sure the medical collector contacting you works for them.

Secondly, ask the collector for information about the debt. Find out the exact name on the debt, health care provider and date of services. This data may help you decide if the debt is yours or not.

Can You Ignore Medical Debt?

You don’t want to ignore medical debt. If the debt belongs to you, medical collectors can continue to call you. If it’s not yours, you only have 30 days to file a dispute.

Request Verification of Debt

If you don’t believe the medical debt belongs to you, take the next step by filing a dispute. On the other hand, if you believe the debt is yours, take one more step to make sure. Ask the medical collector to send you an itemized list that includes coding. By law, you have a right to this information. If the medical collector can’t provide this information, try contacting the health care provider directly.

Once you receive this report, check the names, dates and services listed to make sure everything is correct. You can also contact your insurance provider to request a claims history report. This data can show if the insurance company paid for these services.

Also, keep in mind that in most states, minors aren’t able to enter into a legal contract. This means that in many cases they’re not responsible for medical debt accrued when they were a minor. If you were a minor at the time of this debt, be sure to file a dispute.

File a Dispute

You have the right to file a dispute if you think the medical debt is incorrect or doesn’t belong to you, but you must act fast. The law only gives you 30 days to file a dispute from the first contact. In your dispute, explain why you think the debt is not yours, note any mistakes you found and provide any documentation.

Once complete, make a copy of your letter and any backup information first before sending your letter by certified mail. Once the collection agency receives your letter, they must stop contacting you and must investigate your response. They also must notify you in writing of the results of the investigation.

If the agency can’t verify the debt, they must stop the collections process. If, on the other hand, they find the debt does belong to you, they can continue to contact you.

Make Sure It’s Listed as Medical Debt

Medical debt can impact your credit score. To determine this impact, request a copy of your credit reports. You can get one free copy of your credit report each year from the three top credit reporting agencies: TransUnion, Equifax and Experian.

Once you receive your credit reports, make sure the information listed is correct. You also want to make sure the credit reporting agencies list the debt as medical debt. This factor is very important, because reporting agencies must handle medical debt differently. How?

  1. Paid-in-full medical debts are removed from your credit report. Starting in 2022, credit reporting agencies will remove medical debt from individuals’ credit reports as soon as it’s paid in full.
  2. Credit reporting agencies will wait before listing medical debt. Credit reporting agencies will now wait six months to one year before listing medical debt on credit reports.
  3. Credit reporting agencies will only list large medical debts. Starting in 2023, credit reporting agencies will no longer list medical debt that’s less than $500 on credit reports.

Despite these changes, unfortunately medical debt can still impact your credit. Even a slightly lower credit score can affect your ability to obtain a credit card, get a personal loan or purchase a home.

If you find any errors on your credit report, including a medical debt that isn’t correctly listed as medical debt, file a dispute with the credit reporting agency. You can send the credit reporting agency a letter that explains the error, why you think it’s wrong and any proof you have of the mistake.

Can You Negotiate Medical Bills in Collection?

If this debt is yours, now’s the time to focus on how to resolve your medical debt. Most collection agencies are willing to set up payment arrangements to help you pay the debt off. However, you may want to try to negotiate your debt first. Some agencies may be willing to accept a lower payment or agree to 0% interest, for example.

Know Your Rights

When dealing with medical debt collectors, the most important thing is to know your rights. Know what regulations medical debt collectors must follow in your specific state. It’s equally important to make sure the debt belongs to you. Always file a dispute if this debt doesn’t belong to you or if the collection agency can’t provide you with an itemized list.

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