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Medical Debt

Can debt collectors request copies of my credit reports?

Getting collected on or credit reported over a medical debt? Talk about adding insult to injury… Don’t despair, medical bills are consumer debts, and medical debt collection gives you rights under laws like the Fair Debt Collection Practices Act and Fair Credit Reporting ActTurn the tables on medical bill collectors and reporters, possibly netting you thousands of dollars in the process.

Medical debts and charges are amongst the error filled consumer debts, making them ripe to dispute under fair debt and fair credit laws. These accounts meet the FDCPA’s definition of a “debt:” a consumer’s obligation to pay money arising out of a transaction in which the money, property, insurance, or services are primarily for personal, family, or household purposes.” This legal conclusion gives you rights and options with regard to your medical debts.

Medical bills on your credit report can hamper your ability to borrow money or gain employment, and you can be sued for the debt, which could result in a debt collection lawsuit, wage garnishment or bank levy. Ignoring the debt won’t make it go away, and it could make the situation worse.

If a medical debt you dispute in any way is on your credit report or being collected, contact a consumer protection attorney and see if you are entitled to relief or compensation.

Medical Bill Disputes

Medical bill disputes arise when you have medical debts that you consider invalid, in whole or even in part. For example, perhaps you never received the service you are being charged for, or you are being charged illegal interest on the debt. Or, maybe you’ve been double billed or a wrong medical billing code was entered. Always read the medical provider paperwork (contract for services rendered) carefully, and always check to make sure you are not being overcharged. Some states limit the amount of interest and the amount of collection fees that can be added.

Such debts can be disputed just like any other debt, both under the FDCPA as well as under the FCRA. The failure to honor a meritorious dispute can have big consequences for the collector or credit reporter.

Save All Medical Bills and EOBs, and All Other Account Paperwork

Account paperwork, including contracts for services, bills and explanations of benefits (EOBs), are often your first line of defense in a medical billing dispute. EOBs are provided by your health insurer and detail the medical services and treatments that have been paid on your behalf. EOBs will also include any balance you’re responsible for paying. Often, you’ll need an itemized bill from your provider that lists the line item charges so you can verify they are correct. Being proactive can prevent expensive mistakes from happening.

If you are contacted by a collection agency and you don’t believe you owe the bill, ask the collection agency to validate the debt. You also have the right under the Fair Credit Reporting Act to dispute it with the credit reporting bureaus (TransUnion, Equifax, and Experian).

Statute of Limitations on Medical Debts

Medical debts are generally considered closed-ended credit contracts with a definite pay-off time limit. Unless you have a separate agreement, medical debts are usually payable at the time services are rendered or in some cases within 30 days. This means the date of default begins quickly after services are rendered. Check your state’s statute of limitations (SoL) before you pay anything, or simply ask a free consumer lawyer if the debt is even collectible.

Also consider the credit reporting statute of limitations, which is seven years from the date of default.

Insurance Company Responsibility

You are responsible for paying your medical debts. If you happen to have medical insurance, the insurance company receives the medical bill in accordance with its stated requirements and the medical service is covered under the policy, then your insurance company will be responsible for paying the debt.

As a convenience, most medical providers offer to bill your insurance company. However, accepting their offer does not relieve you of the responsibility of ensuring the medical bill gets paid. It’s not uncommon for medical providers to submit medical bills after an insurance company’s deadline for filing. In some cases, the provider may, for a number of odd reasons, not submit the medical bill at all. Regardless of the reason, the bottom line is that the consumer is still responsible.

In some cases, your insurance company may reject the bill or flat out refuse to pay. The fact that your insurance company did not pay is not the medical provider’s concern! The medical provider has the right to expect payment in a timely manner. You may have to argue with your insurance company and even go through dispute resolution but while you’re doing that, the medical provider is still entitled to timely payment.

Medical billing is complex, mistakes often happen. If your doctor’s office billed the insurance company properly, follow up with the insurance company to figure out why the bill wasn’t paid. If you believe a medial bill is being collected wrongly or you believe you are a victim of illegal or unfair debt collection practices, submit your information for free review. Being proactive in clearing up mistakes can save you thousands of dollars.

Options For Dealing With Medical Debt

Medical debt is an unsecured account, meaning you have not provided any collateral against the extension of credit. In many cases, this makes medical debt easier to negotiate than other debts, especially with the help of an experienced negotiator. You can also find out if you qualify for Medicaid or file for bankruptcy if you are being sued or garnished. Finally, before you do anything, see if the account violates your rights and if you have any additional leverage.

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