By David Pilley on March 18, 2011
.jpg.aspx?width=75&height=75) Just like with any typical debt, a medical bill can change hands if not paid off in a certain period of time. If you are unable to pay a medical bill, the hospital has the right to send the bill to a medical collection agency. Usually after 120 days, a doctor will sell the unpaid debt to a collector, and from then on you will be dealing with the collection agency. Don’t think it’s all bad if this happens because dealing with a collection agency for your medical bill may benefit you.
Selling your debt to a collection agency benefits the doctor, as well. Most doctors don’t have a financial background, and they don’t have colleagues who specialize in collecting debts. Instead of repeatedly calling you or sending you bills, they will sell the bill to a collection agency for an amount less than the total debt owed. Doctors incur a small loss, but this lost amount can be written off for tax purposes, so they can continue doing their job saving people’s lives.
When a doctor sells a medical bill to a collection agency, medical privacy issues remain intact. Doctors must follow rules when collecting on unpaid bills, and with a third party involved, doctor-patient confidentiality is still in effect. Though doctors are not required to have your consent before selling the debt, they can release only certain information about you, like your birth date, Social Security number, and payment history. If the collection agency finds out any of your medical information, this is against legislation in the Health Insurance Portability and Accountability Act (HIPAA), and you have the right to sue. If the name of the hospital or health care facility could give away what type of medical treatment you were receiving, doctors must mask the name under the Fair and Accurate Credit Transactions Act (FACT). A health care facility with something like “Mental Health” or “Ears, Eyes, and Throat” in the name should be changed to something generic like “Medical Provider.”
Having your medical bill sent to a collection agency may benefit you if a monthly payment plan was not an option from your doctor or if the payment plan was unaffordable. The collection agency might set up a plan where you pay just a few dollars every month, and the agency may be willing to discount the amount owed by a small percentage. You don’t have to pay the entire debt in a lump sum. Work with the collection agency and tell them how much you are able to pay each month.
Finally, like any collection agency, a medical collection agency has to follow certain rules while attempting to collect the debt. They cannot call your neighbors or employees, they cannot use threatening language, and they cannot call at “unreasonable hours” trying to collect the debt. Keep this in mind if you have a medical bill sent to a collection agency.
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