You received a significant medical bill but didn’t have the funds to pay it. You set the bill aside, and the following month the bill came again, and the month after that. Suddenly, a collection agency contacts you about payment. What can you do? You need to know about medical debt and collections before you pay it.

Understanding Collection Agencies

Collection agencies commonly handle unpaid medical debt. Like any other bill, medical bills come with a due date. If not paid by this date, the provider may send notice that the debt is going to collections. Sometimes, you might have the chance to extend the due date to avoid this. However, once the debt enters collections, it becomes medical debt, and the collection agency has the right to seek payment from you.

Having an account in collections can negatively affect your credit report. Though not all organizations do this, some will encourage you to make timely payments and work with you to set that up. In most cases, medical debt gets listed as a public record, which could mean you go to court.

Your Rights as a Consumer

The first thing to know is that you have rights as a patient regarding medical debt. The No Surprises Act passed in January 2022, is an excellent place to start. This law means that the medical provider must alert you when receiving care that the costs are out-of-pocket or that the provider may not be in network with your insurance company.

Also notable, if you don’t have health insurance or want to pay out-of-pocket without using your policy, before receiving care, the provider must provide a “good faith” estimate for the services they will provide you.

Communicating with a Collection Agency

Collection agencies have the right to seek payment from you and to do that, they can call you to talk to you about valid debts. They cannot contact you about any debt unrelated to you or that you do not owe for any reason. If they contact you, you also have the right to ask the debt collector to verify that the debt is yours. They must send verification of the debt to you within five days of requesting it. If the debt is yours, they can work with you on collecting what you owe.

Verifying Debt and Disputes

If you do not believe the debt is yours, require proof. That means the collection agency must be able to provide a clear indication that:

• You owe the debt.
• The amount of the debt owed.
• The original owner of the debt (such as the medical provider you received care from).
• The date the debt occurred.
• Attempts to contact you.

If you do not believe the debt is accurate, dispute it following the process of the provider requirements. You have the right to see accurate proof that the debt is yours. If the debt collection company took you to court for this debt, they would have to show the information above was accurate and that they have the legal right to collect on it.
Payment Assistance and Options

A debt collection agency for medical debt can work out a payment assistance plan with you. That plan will address your specific needs, such as how much you can afford to pay on your debt each month, and then set up a process for making payments.

Before this happens, ask for discounts or a reduced amount owed. Remember that they don’t have to offer this to you, especially if the agency believes you have the means to repay the debt and it is yours. Yet, many will work with you to lower high debt amounts.

Legal Action and Bankruptcy

If you find the debt is inaccurate or that the collection agency cannot prove it isn’t, or there are violations of the No Surprises Act, seek out legal advice and guidance. You may be able to contact the Consumer Financial Protection Bureau for guidance on reporting the collector.

You may have the right to file bankruptcy, eliminating the debt you owe. If this is a debt you cannot pay, and is of significant value, find out how Chapter 7 or Chapter 13 bankruptcy could help you.

Finding a Financial Counselor or Attorney

Working with a financial counselor or a bankruptcy attorney can illuminate your legal rights and options. Often, this is one of the first steps you should take if you know you cannot pay your medical debt.