Jan Stieger of the Receivables Management Association International, a business group of debt buyers, called these cases „unique.” I asked her if she thought hospitals could sell their debts because collecting medical debts could be considered a morally crazy thing. She said that increasing consumer debt should be seen as a privilege, not a right. „The credit ecosystem operates on the principle that legitimate debt must be repaid,” she said. Krevat`s bills arrived while she was still being processed at Columbia University`s Irving Medical Center. One of them came from one of the hospital`s doctors, Mathew R. Williams, for $9,000. Another came from a doctor named Aziz Ghaly for $17,418. A few months later, a separate bill from Weill Cornell Physicians indicated that she owed $22,464. If the medical bill is yours, it`s correct, and you owe the money, the debt collectors can contact you to try to collect it.
They can sue you to get the money back – and if they win the lawsuit, they could grab your salary or place a lien on your home. However, they must comply with applicable debt collection laws, such as avoiding harassing or abusive calls and complying with requirements when reporting debt to consumer information companies. They can`t call you day and night, and you have the right to tell them to stop contacting you. After trying for a while to collect on their own behalf, some hospitals and doctors` offices sell their debts to debt buyers who pay pennies for every dollar owed and then do their best to simply collect more than they paid. Why hospitals sell their debt is a matter of debate, but several consumer advocates have speculated that it`s because hospitals don`t want their good reputation to be associated with aggressive debt collection tactics. They prefer to leave intimidating calls to a more anonymous organization like Pendrick Capital Partners, a leading buyer of medical debt. In this way, the hospital receives at least a small amount immediately, instead of bearing the entire sum. In a statement, Jan Stieger, executive director of the Receivables Management Association International (formerly known as the Debt Buyers Association), said debt buyers are „generally less aggressive” than healthcare systems when it comes to debt collection because they can spend more time with the debtor. If you don`t have health insurance, or if you pay for care without using your health insurance, your provider will need to give you a „gullible” estimate of the cost of your care before receiving care.
If the amount charged is $400 or more above the estimate, you may be able to dispute the fee through the patient-provider dispute resolution process. Some medical or dental practices may encourage you to sign up for a special credit card to pay your medical bills, but these cards are usually not a good choice for paying medical bills. Credit cards often have high interest rates or adverse terms. You lose the opportunity to negotiate with your doctor about the bill. Using this type of card turns your medical debt into credit card debt. Unlike credit card debt, medical debt typically involves little or no interest payments and late fees. While medical debt may eventually end up on your credit report, it won`t appear for at least six months. An outstanding credit card debt will immediately affect your credit score. You`re also less likely to be sued for medical debt than for credit card debt.
Medical debt can remain unpaid for long periods of time without significant negative consequences. Less weight is given to medical debt: New scoring models like FICO 9 and VantageScore 4.0 weigh less than other types of collections, so they don`t affect a score as much. However, not all creditors use these new rating models, so medical recoveries could still affect your ability to get loans in the future. For former patients who owe money, Antico said, these debt buyers may be better than being persecuted by the hospitals themselves, because debt buyers only need to collect a fraction of the debt to make a profit. Debt collection agencies will also call you and constantly push for payment. But it`s easy to stop, especially for medical debt. Few hospitals and health care providers will collect their own debts, but instead hire debt collection agencies. Under federal law, these agencies must stop contacting you if you simply send them a letter asking them to stop. Krevat launched an Excel spreadsheet to track the insurance company`s payments. Despite her fatigue, she spent hours on the phone taking detailed notes about her conversations with various customer service representatives. She wondered if the debt would affect her credit rating or if hospitals would start tying up her husband`s salary. She has rarely had the same representative twice.
„Every time I made one of those phone calls, it was like being a stranger telling the whole story from the beginning, like I`d never told anyone before,” she said.