Medical Debt Collection Difficulties

Past Due Medical Bills folder“Collecting Medical Debt — How Aggressive Should You Be?”—the NL blog first published 2/23/2013 and republished 2/2/2016—continues to get hits every week. Because of the ongoing interest in this subject, we published another blog on 2/20/2015 titled “Collecting Medical Debt? – Consider This When You Do” It reported on some recent developments in Medical Debt Collection, and how these changes could affect your actions in the future. A guest blog by attorney Mitchell L. Wong entitled The Future of Compliant Medical Collections was published on 2/9/16. Today’s topic adds to the previous blogs by covering some of the issues that can make medical debt so difficult to collect.


All statistics regarding the amount of medical debt are approximate, but still staggering. One estimate is that 42.9 million people have outstanding medical bills. Researchers agree that between 51 and 52 percent of collection trade lines come from unpaid medical bills. Let’s hope that, if your firm or agency collects medical debt, you’re doing better than the average of recovering just $15.77 for every $100 owed once a patient’s bad debt is turned over to collections. It may also be shocking to learn that, according to MGMA, only 25.3 percent of practices offer a payment plan at the time of service. Instead approximately 46 percent offer a plan only as a last resort before a bill is sent to a collector. That and other healthcare provider practices help to explain why so much medical debt ends up in collections.

Why Patients Don’t/Can’t Pay

  • Studies have shown that patients with high deductible health plans are less likely to pay their medical bills, and that many are confused about the large medical bills they receive.
  • Some consumers are possibly unaware of when, to whom, or the amount they owe on a medical bill, or even whether payment is their responsibility or that of an insurance company.
  • Unemployment often results from illness. Loss of income and insurance coverage, and the added expense of purchasing COBRA also affects a patent’s ability to pay.
  • A major medical event may cause a working family member to quit or reduce hours in order to become a caregiver.
  • Significant health events can also compromise a person’s ability to manage the paperwork of medical bills.
  • People who don’t pay medical bills report higher rates of other problems – including affordable housing and other basic necessities, credit card debt, bankruptcy, and barriers to health care.
  • Sixty-one percent of those who’ve had problems paying medical bills say they either just meet their basic expenses (43 percent) or don’t have enough to meet basic expenses (18 percent).
  • While the chances of falling into medical debt are greater for people who are uninsured, most people who experience difficulty paying medical bills have health insurance that doesn’t cover all of the related expenses.

What to Consider Before Taking on Medical Debt

  • Is there contact information for the debtors? (Current address? Working phone number? Current employer?)  Have the accounts been run through skip tracing software?
  • How much money is owed? Small accounts are usually not cost-effective to collect or litigate.
  • What is a patient’s capacity to pay? (Insurance, active borrowing, amount owed, home owner?)
  • What advantage to collect debt does your agency or firm have over the medical provider?
  • Consider the advantages of purchased debt over straight percentage accounts still owned by providers.

Strategies for Helping Patients Pay

Some of these strategies could apply to medical debt that is still with the provider or to agencies or law firms after the debt has gone to collections:

  • Give patients a variety of options for paying. Accept cash, checks, credit and debit cards.
  • Let patients pay by credit card through the mail by writing a credit card number on an invoice.
  • Give patients the opportunity to pay any portion of their balance at any time. Set up an online bill payment option to allow patients to pay at their convenience.
  • Set the patient up on a payment plan. Let patients in financial difficulty design the terms of the plan.
  • Train all staff to firmly but gently communicate with patients/debtors about financial responsibility issues, regardless of their medical and financial situation.
  • Replace collections letters with personal, empathetic collections phone calls.
  • Provide a monthly payment coupon book for patients on payment plans.
  • Tell patients you report unpaid medical debt to the credit bureaus.

The National List of Attorneys has many members who specialize in collecting medical debt. You can find an attorney who meets your specific needs by visiting our website at or by calling us at (800) 227-1675.


Categories: Business Relationships, Debt Collection, medical debt collection, NL Insider

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