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In the ever-evolving realm of healthcare, medical billing takes center stage. It’s the financial heartbeat of the healthcare system, ensuring that our dedicated doctors, nurses, and healthcare facilities receive compensation for the invaluable services they provide. However, there’s a twist – medical billing often appears as an enigmatic labyrinth, leaving patients feeling like intrepid explorers in uncharted territory.

So, let’s embark on the journey of unraveling this mystery: what is medical debt collection? When your medical bills remain unpaid, this process springs into action. It’s the phase that intervenes when those bothersome medical bills accumulate, forming a formidable mountain of financial concern.

You might have come across medical debt myths, the kind that turns it into a nightmare. Fear not; we’re here to be your myth-busting guides. Today, our mission is to separate fact from fiction and illuminate a few burning questions: “When do medical bills go to collections?”, “Can I pay the hospital instead of the collection agency?”, and many such questions regarding medical debt myths.

So, get your favorite drink, settle into a comfortable spot, and let’s set sail on an exploration of the intricacies of medical billing and debt collection.

Is it illegal to send medical bills to collections?

Is it illegal to send medical bills to collections?

Medical debt can be sent to collections if it remains unpaid after a certain period of time and is considered delinquent. To protect patients’ rights and guarantee a fair collection procedure, rules for sending medical bills to collections have been put in place. These rules may differ by state, county and/or regions

Let’s examine the details with some facts:

No Surprises Act Protection: On January 1, 2022, the No Surprises Act was implemented to protect customers from receiving medical bills/charges that were
unexpected. Now prior to receiving services; a provider must provide a Good Faith Estimate.

Good Faith Estimate: This estimate reflects the cost of your service if you do not have health insurance or if you pay for services without utilizing it. If the billed amount exceeds this estimate by $400 or more (without any unexpected complications), you may dispute the charges.

Debt Collection Regulations: Debt collectors can contact you regarding valid debts you owe. When you receive a collection notice, you have the right to ask them to verify the debt. The collector has 30 days to provide a copy of the original medical bill to you as validation of the debt.

Credit Reporting: Debt collectors are not allowed to report a medical bill to credit reporting companies without attempting to collect the debt from you first.
Consumer Protections: Reputable credit counselors are transparent about their services and fees and avoid charging upfront fees.

When do medical bills go to collections?

When do medical bills go to collections?












Medical bills may go to collections when the healthcare provider deems them as delinquent. Many providers wait for at least 120 days before turning your unpaid medical debt over to a collection agency. However, some providers might extend this period to 180 days, while others may act sooner, waiting only 60 days. Each organization’s threshold for considering an account to be “delinquent” varies based on internal policies. 

To add additional layers of protection for consumers and standardize the process, the three major credit bureaus—Experian, TransUnion, and Equifax—have adopted a 365-day waiting period before unpaid medical collections debt appears on your credit report. This one-year grace period is a safeguard to give you ample time to address the issue. Medical bills under $500 cannot be reported. Once you pay the bill in full, it must be deleted from your credit file.

So, to answer a question, “when do medical bills go to collections”, the grace period varies. However, recent regulations provide a standardized one-year grace period to allow you to resolve the issue before it impacts your credit.

Can a company send you to collections if you are making payments?

Among the rules for sending medical bills to collections, a company can potentially send you to collections even if you’re making payments, especially if those payments are not meeting their expectations or if the debt isn’t being paid off in an acceptable time frame. It’s a common medical debt myth that making partial payments will automatically shield you from collections.

Here’s what you can do: It’s critical that you contact your hospital or provider as soon as possible if you are unable to make the whole payment. The majority of providers are accommodating and may arrange a payment schedule to make things easier for you. To guarantee clarity and prevent misunderstandings, it is essential to have written confirmation of any payment agreement.

Additionally, some hospitals have partnerships with certain banks that offer interest-free payment plans, spanning 2-3 years, provided you make your payments on time. These options can make medical debt more affordable and help you avoid the hassle of dealing with collection agencies.

Can I pay the hospital instead of the collection agency?

Indeed, you may pay the hospital directly rather than paying a medical debt collection agency.

Speak with the financial services or billing departments at the hospital. Explain your circumstances and your desire to pay the bill in full by sending them a direct payment. Make sure you have all the data required to complete the payment. Make sure you pay the hospital in full or according to the payment plan you have agreed upon. If the account was referred to the medical debt collection agency, make sure that your payment is correctly recorded, communicated to the medical debt collection agency and the debt is settled at the agency level. Be sure to save all the documentation of the payment you made.

Money, so the saying goes, is what keeps the world running. This paradigm is particularly applicable in the United States, where debt is the primary driver of the economy. The US has over $17.06 trillion in consumer debt as of 2022. The typical American borrows money to pay for food, houses, and even automobiles

It’s hardly shocking that at least one in three Americans have debt that is in collections given those figures. Thus, don’t feel guilty. It’s not just you

Unmasking the Medical Debt Myths: The Facts You Need!

Navigating the world of medical billing can be a complex journey, but it’s crucial to separate myths from facts and stay informed. Understanding the rules for sending medical bills to collections and dispelling common medical debt myths in 2023 is key to making this process less daunting.

At Medical Data Systems, Inc., we offer a proven, trusted, and innovative approach to help our clients manage their collections processes efficiently and effectively. We prioritize security, maintaining our SOC2 Type II Certification to safeguard the confidentiality of our clients’ and their patients information. With our commitment to transparent and secure practices, we aim to empower patients and providers alike, ensuring that medical care and financial management can go hand in hand, promoting well-being for all.