In a recent report by the Consumer Financial Protection Bureau (CFPB), it was reported that a majority of consumers contacted by debt collectors were for medical bills. Another recent CFPB report highlighted a complaint where a debt collection agency falsely represented themselves as a law firm in order to attempt to frighten consumers into paying. As the CFPB consumer collection survey reveals, and with possible repeal of the Affordable Care Act, more Americans may be facing more medical debt than ever.
With consumers of all ages and financial status affected by medical debt, We will share News and highlight better options for collecting medical debt.
Medical Debt Collection in the News
Nebraska Law to Protect Those Sued by Medical Debt
In 2016, ProPublica reported that Nebraskans were being sued for medical bills as low as $60. A new law is being proposed to protect those sued by debt collectors for medical debt. Previously, collectors were not only allowed to garnish wages but also remove all money from the debtor's bank accounts. The new bill protects the first $2000 of a debtor's bank account and also reduces the amount of garnishment for those who have dependents. Nebraskans will also be protected under a new standard for contempt of court if the bill passes. Currently, if a debtor does not appear in court for a "debtor's exam", they can be held in contempt and a warrant is issued for their arrest.
How The ACA Affected Medical Debt
The National Bureau of Economic Research published a study in the spring of 2016 stating that offering healthcare insurance to low-income consumers helped them to avoid medical debt. Prior to the passing of the Affordable Care Act (also known as Obamacare), uninsured Americans had the highest rates of medical bankruptcy and unpaid debt, affecting their credit scores. Once credit scores are affected, so too are housing, auto financing and other necessities. The same month as the study, the New York Times discovered that the expansion of Medicaid to offer free insurance to low income families reduced the amount of overall debt sent to collections. With the ability to pay medical bills, the families were also able to afford rent, utilities and other bills.
Credit Reporting on Medical Debt
In March 2015, three major credit reporting bureaus announced changes in how medical debt would be reported. TransUnion, Experian, and Equifax agreed to a 180-day waiting period before showing medical debts on credit reports. The reasoning behind the move was to allow doctors, hospitals and other medical providers to accept and receive insurance payments before declaring a medical bill past-due. The change also allowed extra time for identity theft and other false positives to be resolved, provided consumers were examining their credits reports regularly. Existing medical debts that had been paid off would be removed from credit reports as well.
Collecting Medical Debt
Congressional Republicans are moving forward with a plan to repeal certain provisions of the Affordable Care Act but specifics have yet to be drawn out. 1 in 20 Americans already have accounts that are 30 - 180 days past due, mostly with student loans and credit card debt. A medical crisis, especially for the uninsured, could easily put a consumer at risk for medical debt. The volatility of laws affecting medical debt, and consumer debt in general, means that debt collection agencies must be sensitive to the challenges of collecting on medical bills.
At BYL, we choose to treat people the way we'd like to be treated. A debt collection agency's responsibility is to represent themselves fairly and avoid violations of the Fair Debt Collection Practices Act. We offer our clients:
- Quality control monitoring for increased patient satisfaction
- In-depth knowledge of patient/responsible party relationships
- Patient-centric approach to recoveries stressing education and sensitivity
Learn more how we can help collect medical debt and also keep patient/medical provider relationships healthy.