“It was an old bill that I didn’t even know I had!” Nearly two-thirds of people who complained to federal regulators about medical debt collectors said they did not owe the money, a new  report found. Researchers determined that more than 60 percent of the complaints were one of the following: that the debt wasn’t owed in the first place, that it had already been paid or had been discharged in bankruptcy, or that it wasn’t verified as a debt the consumer actually owed. Documentation seems to be key in successfully collecting most medical debt.
“Complaints about medical debt are the second-largest cause of debt collection complaints made to the bureau, after credit cards,” the report found.
More than 40 million Americans patients are contacted for a medical-related debt each year, making it the leading cause for people to be contacted by a debt collector, according to the CFPB.
Medical Billing Process
We all know that routine medical bills, especially those involving hospitalization, sometimes can take months to sort out, particularly if a doctor, hospital or other medical service is not part of a patient’s health insurance network. It can become even more challenging for consumers when bills are sent to medical-debt collectors and reported to credit bureaus based on outdated or possibly incorrect information.
Chi Chi Wu, a lawyer with the National Consumer Law Center, said “The findings, in part, reflected the complexity of the health care payments system, which often involves insurers that may pay all or part of the cost of care. Consumers may not understand the details of how their health insurance works, and may think that it covers more than it actually does. Co-payments and deductibles — the amount that [patients] pay before insurance does — can often trip people up. The medical and health care billing process is just really confusing and complicated.”
The top 10 reasons given for debt collection complaints, as reported in an April 20 InsideARM article chart, are:
- Debt is not mine
- Debt was paid
- Cannot verify debt
- Frequent/repeated calls
- Collecting wrong amount
- No dispute notice
- Third party disclosure
- Threatened Legal action
- Identity theft debt
- Threat to sue on old debt
Complaints about Abusive Behavior
The report mentioned above also included complaints by consumers about alleged abusive behavior by collectors. However, only numbers 4 and 8 on the Top Ten List could be construed as possibly being abusive. In one instance mentioned in the report, a consumer received a call at work, supposedly from a doctor calling about a medical emergency. But the call turned out to be from a debt collector. In another, collectors called a consumer’s relatives to demand payment.
A story in AZCentral.com reported that one consumer with a medical debt received 18 calls in 15 minutes from a debt collector. Another consumer, a teacher, reported receiving multiple calls at work, home and on her cellphone over her son’s $200 medical bill. When she asked the debt collector not to call her at work or her son while she investigated the four-year-old bill, she said the person ignored her. Other complaints report calls harassing friends and family or the use of abusive language. Unfortunately, it’s stories like these that often make headlines, when they really represent only a small percentage of the complaints filed.
Nevada has the most medical debt collection complaints per capita, with 11.4 complaints per 100,000 residents. Florida (9.3), Delaware (9.0), Georgia (7.7) and New Jersey (7.4) have the next highest rates of complaints per capita. Colorado was seventh highest, and Rhode Island was lowest.
CFPB Study on Credit Reporting
These statistics from the CFPB’s recent study on credit reporting practices with regard to medical debt may surprise you:
- One in five consumers has a medical collections item on their credit report
- About half of the overall debt collection trade lines are from medical bills
- Fifteen million consumers have medical debt collections items as the only collections items on their credit reports, and many of them have no other seriously delinquent accounts
Although the impact on credit reports is not categorized by the CFPB, it appears to be a significant source of complaints: 1,810 or 35 percent of medical debt collection complaints contained in the database, include the text “credit report.”
NL Insider has published these additional blogs on medical debt collection:
- Collecting Medical Debt — How Aggressive Should You Be?
- Collecting Medical Debt? — Consider This When You Do
- Medical Debt Collection Difficulties
- The Future of Compliant Medical Collections
If you collect medical debt, we hope that the information in today’s blog and these other sources will help you to be successful with a minimum of complaints. If you need an attorney’s help with collecting past-due medical debt, the National List is happy to refer you to just the right specialist for your needs.