Perhaps you’re getting hounded by a debt collector for a medical bill that’s the size of a house mortgage. They’re sending letters and calling. Perhaps they’ve even filed a court judgement or lien against you in an effort to collect – and you’re at your wits end.
Or perhaps the debt is small, but you have no idea what its for or don’t feel like you should have to pay it.
Or anywhere in between.
No matter the circumstances, hearing from a debt collector can be an incredibly nerve-wracking experience. However, know that you’re not alone. According to the Commonwealth Fund, 79 Million Americans have problems with medical bills or debt. More than 1 in 5 people in the US have medical bill or debt issues. That means it’s almost certain that someone else you know is also experiencing these same problems.
In this article, we’ll go through the 7 steps to take to fight medical bills in collections to make sure you pay as little as possible.
Before we begin, it’s important to note that even if you’re getting hounded by collection agencies, your credit may still be intact. Collection agencies don’t always report debt to credit reporting agencies, and even if they do report you immediately, it will still take 6 months to show up on your credit report.
Step 1: Validate and Verify Your Debt
According to Section 809 of the Fair Debt Collection Practices Act (FDCPA) a debt collector must validate your debt within 5 days of reaching out to you.
Validating a debt includes providing information about the following 5 items:
- The amount of the debt
- The name of the creditor to whom the debt is owed (that is – the hospital or doctor’s office that is saying you owe them money)
- A statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector
- A statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
- A statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor
If the debt collector didn’t send this information along with notice of an attempt to collect a debt, you should request it.
Once you receive the debt validation information, the next step is to dispute the debt. Disputing the debt both a) forces a debt collector to verify your debt, and b) stops collection activities until the debt has been verified.
The way to do this is to write and send a letter via certified mail (so that someone has to sign and you can prove receipt of the letter) to the address that the debt collector provided stating that you’d like to dispute the debt.
Once this is done, the debt collector is required by law to send verification of the debt as well as the name and address of the initial debtor.
If the debt collector is mistaken in reaching out to you, this could force them to realize their mistake. Either way, you’ll get information (such as a hospital bill) about the debt in question so you know exactly what you’re dealing with, as well as a reprieve from collections calls.
Step 2: Demand That the Collections Agency Only Contact You in Writing
Under the FDCPA you have the right to have collections agencies only contact you via writing or cease contact altogether.
We recommend demanding that the collections agency only contact you via writing. This serves multiple purposes:
- Lowers your stress levels since you’ll no longer have to receive phone calls from the collections agencies
- Ensures that there’s a paper trail of all communication with the debt collector (which can be used later)
- Keeps communication open so you know if the debt collector is likely to file a judgement or a lien against you (if you demand that the debt collector cease contact altogether, you may not be notified if they decide to file in court)
In order to do this, send another certified letter to the debt collector demanding that they cease contacting you, family members, and associates via phone and only contact you directly via mail.
Again, we recommend a certified letter so that you have proof that the letter was sent and received.
Step 3: Verify whether or not insurance already paid the amount you owe
While it may seem crazy, it’s not uncommon for hospitals to send a patient to collections while still filing paperwork with the insurance company (and to keep them there even after the insurance company has already paid).
At Resolve, we’ve seen on multiple occasions collections agencies going after a consumer for a medical debt plus interest despite the insurance company having already paid the amount owed – which is absolutely crazy.
If you have insurance, it may be up to you to determine whether or not your insurance company already covered the procedure.
The first step to doing this is to call your insurance company and ask them directly whether or not they covered your procedure and whether you still owe anything to the hospital. The insurance company rep on the other end should be able to walk you through your Explanation of Benefits.
After that’s done, call the hospital directly and compare notes with what the insurance company said you owe (even if your balance is in collections, the hospital will still have all of the information regarding your account and should be able to talk to you about your balance). If the amount the hospital says you owe is different from what your insurance company says you owe – you’ve found an error. In this case – you should get both the hospital and the insurance company on the line so they can work it out.
Step 4: Negotiate with the Hospital
Either you don’t have insurance or your insurance company paid everything it should and there’s still left over money that you owe the hospital.
The good news is that many hospitals will negotiate. And the better news is that even though your account is in collections, you should still be able to negotiate with the hospital (we experience this all the time at Resolve).
For an in-depth explanation of how to negotiate with a hospital, check out Section 2 of our Guide to Lowering Your Medical Bills.
However, if you don’t have time to dig into pages and pages of information follow the below 4 steps:
- Call up the number on the bill and ask for an address or a fax number to send a settlement offer to (note that reps are often trained to deflect and try to get people to apply for “charity care” or give up, be firm but polite in requesting the address/fax # for a settlement offer).
- Come up with a settlement number that you can afford.
- Submit your settlement offer.
- Follow-up every week or so. A favorite trick of hospitals is to “lose” your settlement offer so dogged persistence is key here.
In addition, you should keep careful records of every point of contact. Take notes whenever you call that include date and time, who you talked to, and what you talked about. Whenever you mail or fax anything over, write down the day and time and exactly what was sent to the hospital.
Having the above information at your fingertips will come in handy when working through the process.
Step 5: Negotiate with the Collections Agency
If negotiating with the hospital doesn’t work (or the hospital tells you there’s nothing they can do and you need to talk to the collections agency) – you can always negotiate with a collections agency.
Collections agencies spend a large sum of money trying to collect debts from consumers, so you’re doing them a favor by offering to pay a smaller amount up front. In fact, many collections agencies will offer 20%-30% off just for calling in. However, you should be able to do better.
Like with a hospital, sending in a written settlement offer will often times get you further than simply arguing over the phone. Follow the same steps as above, and remember to write everything down.
Step 6: Talk to a Consumer Protection Attorney
If you’re unable to make headway on negotiating with the hospital or collections agency to lower your medical bills, or you have a judgement or lien filed against you, it may be worthwhile to consult with a Consumer Protection Attorney.
Consumer Protection Attorneys can walk through consumer protection laws specific to your state and give you a better idea of exactly what your rights might be. They can also review how the debt collectors have been behaving to ensure that they haven’t broken any laws and that you’re being treated fairly.
Additionally, if you have any legal motions filed against you, they can advise you on the best course of action moving forward, including defending you in small claims court.
Most Consumer Protection Attorneys will provide a free consultation to go over the circumstances of your case and determine whether or not it’s worthwhile for you to hire them. We recommend conducting a google search for attorneys in your area and reaching out to set up consultation calls.
Note that attorneys go through a lot of training and are expensive (easily $400-$1,000 per hour), so it usually is only worth hiring one if you have extremely high bills (generally $20,000 or more).
Step 7: Work with a Medical Billing Advocate
A good medical billing advocate can fight a bill that’s in collections. They’ll verify and validate the debt, and reach out to negotiate with both the hospital and the collections agency. They can analyze bills for proper insurance coverage, identify errors, and negotiate prices directly.
It’s important to note that different medical bill advocates may have different specialties. That is, some will be experts at negotiating while others may be better suited to finding every single potential billing errors. One isn’t necessarily better than the other, though in a situation where you have bills in collections – you’ll likely want to work with an advocate who is great at negotiating.
When talking to a medical billing advocate, they should be able to articulate what the primary strategy for maximizing savings will likely be, and why. You should also understand how the medical billing advocate gets paid and make sure that you’re comfortable with that setup (some will charge hourly, others on a per case basis, others only if they successfully save money). Finally, you should get an understanding of successful cases the advocates have resolved.
Here at Resolve – we use data-driven insights, decades of experience in the industry, and negotiation techniques taught at the top business and law schools to maximize savings. We have different experts focused on billing errors, insurance appeals, and pure negotiations – to ensure that we maximize your savings. For a free consult, call us at 877-245-4244 or click here to schedule a time.
Braden founded Resolve after experiencing first hand how unfair the system is for patients. Prior to Resolve, he built and ran Operations for a renewable energy company and then built and ran Product, Growth, and Operations for a VC-funded edtech company. He received his MBA from Dartmouth’s Tuck School of Business and BA in Philosophy from the College of William and Mary. When not trying to lower healthcare costs he can be found outdoors mountain biking, skiing, or hiking with his dog.