How to dispute medical collections

By Nooreen B
Modified on April 24, 2023
what happens to unpaid medical bills

Almost anyone can be responsible for a medical bill, and these types of bills are one of the main reasons that Americans have debt. In most cases, you will get medical bills from the hospital or clinic. However, in some cases, you may get a debt collector. 

Medical collections can be due to insurance issues. It can also be due to an unpaid medical debt being handled or sold to a debt collector/debt collection agency. But what happens if the medical collections account is not correct? Mistakes do happen with debt collection all the time. So, it is essential to protect yourself and verify a debt is actually your responsibility before you agree to pay it. 

Below you can learn how you can dispute medical collections accounts if they are incorrect. You will also find information on the best ways to proceed with the medical collections you do owe and their impact on your credit reports. 

Get All the Information You Can From the Debt Collector, Your Insurance, and Healthcare Provider

If you get a call from a medical debt collector, it is essential to get all the information you can from the phone call before. Ask about dates, services, the bill amount, the original debt owner (if the debt was sold to them), and the hospital of service. Also, ask about specific details regarding the debt collection agency; ask for their name, phone number, address, and email address.  

Once you are done talking with them, it will be imperative that you also contact your health insurance company (or past provider, depending on dates) and the hospital you visited (which you should know about). If you cannot remember where you got care, your insurance provider can help you find that. Also, you can check things like bank statements or online medical portals for information on payment records. 

You should ask your medical insurance provider whether you owe any out-of-pocket funds/have any debts; they should have the most accurate information. You can also contact your hospital and ask about any medical debt you owe. This should give you a clear idea of whether the debt being collected is yours or not. 

Ask a Debt Collector for a Verification of Debt Letter

After a debt collector contacts you, they must send you a debt verification letter. A debt verification letter will have all the information you need to know about the debt, including the original owner, the hospital’s or clinic’s information, the amount, and sometimes an itemized breakdown of the debt. The debt verification letter will also have information on the debt collector, including their name, phone number, address, website (if they have one), and email. 

File a Dispute Within 30 Days of Contact

The most important part of the dispute process is the dispute letter. Once you receive contact from a medical debt collector, you will have 30 days to file a dispute. You can file a dispute via an email or a certified letter. You can include any documents with this letter, like statements from your insurance company or place of care showing that you have no amount due with medical bills. Anything that proves that you don’t owe the debt will be helpful. 

Once this dispute letter has been sent and received, the debt collector must stop any collection efforts. And send you additional information on the debt. At this point, if the debt is not yours, it will be apparent to the debt collection agency, and you should be cleared. 

The Importance of Repaying Medical Collections if the Account Is Yours 

If you have any unpaid medical collections that are actually yours, it is essential that you pay back those unpaid medical bills. Once that letter or verification is sent, they can begin the collection process. Cooperating is your best option. Most debt collectors are open to a payment plan which can make things more manageable. If you do not cooperate, collection agencies can take you to court and go as far as garnishing your wages—you’ll want to avoid this at all costs! 

Do Medical Collections Show Up on Your Credit Reports?

Bills from medical providers will not show up on your credit report, even if they are unpaid medical bills. It is only when they are sent to collections is when medical bills affect your credit history and credit report. 

As of July 2022, all three credit bureaus changed medical collections reporting. Any paid medical collections account will not show up on your credit report from any credit bureaus. 

Another significant change is with unpaid medical collections. There used to be a six month wait period before these accounts showed up on a credit report; in July, this changed to a year. This extension allows people to pay off their medical collections account before it impacts their credit. 

Although medical debt collections won’t always negatively impact your credit score, it can definitely hurt your credit standing, depending on your credit history and utilization. Having an additional six months to repay your collection accounts before having them reported to a credit bureau can help avoid dealing with this. Once a collection account shows up on your account, it will appear on your credit report for up to seven years. 

It is imperative to keep track of your credit reports for accuracy. And because of the fair credit reporting act, you are entitled to all three free credit reports annually. You can also get accurate credit scores from these reports. 

Ensuring That a Debt Collector Is Labeling the Debt as Medical Debts

Even if the medical debt you are disputing is not yours, if you are still proving it to your debt collector, it is important to ensure that the unpaid debt is labeled as a medical collections account rather than credit card balances, payday loans, etc. Since medical collection accounts get more leniency with credit reporting, it is essential that your collections agency labels the unpaid debt correctly.   

Signs of Scams With Medical Collections

Although medical collection mistakes can happen with legitimate debt collectors, there are tons of scammers out there that may try and collect money from you. The confusing thing is that they initially approach you just like a legitimate collector might for an unpaid medical bill. However, there are some red flags you should look out for: 

  • The medical billing advocate threatens you in any way. 
  • They say that they have already reported to the three major credit bureaus if it is your first time of contact. 
  • The collections agency does not have an address, email, or phone number. 
  • The debt collector does not send a debt verification letter and does not have any additional information on the overdue medical bills. 
  • The medical collection accounts do not have an origin. 

How To Avoid Medical Collections in the Future

Sometimes unpaid medical bills will end up in collections with you not even knowing about them—and you will have to find these unpaid medical bills on your own. Other times because you forget to pay them. The good news is that there are several easy ways to avoid having these bills turn into medical collection accounts in the future; here are some tips: 

Know Your Medical Insurance Policy

Although there are some things like emergency visits that you cannot plan for, there are some instances where you may be able to plan. When scheduling your medical visits, ensure that your hospital/clinic and doctor are in-network providers. Out-of-network services/providers will often cost more to you out of pocket and can add unnecessary debt. You should also be aware of some basic costs like deductible, which you will owe before a scheduled appointment. 

Talk to Your Healthcare Provider

After visiting a clinic or hospital, it will be helpful to talk to a billing associate to ensure that there are no bills you have to pay. Depending on where you go, you may be able to also check whether you owe any bills online. 

Check Your Mail Often

Another important thing you can do to avoid medical bills going into medical collection is to check your mail often. In many cases, you will get a mailed invoice for any medical debt you owe. Checking your mail will ensure that you stay up to date with bills and can be the only way that third-party medical providers can reach out to you. For example, if you get lab work done, it is usually done through a third-party provider, which may not show up when you call your primary hospital. Instead, you will likely get a mailed invoice with your charges. 

Make Sure To Pay Your Medical Bills

If you have any unpaid medical bills, it will be important to pay them if you want to avoid collections. Many hospitals are highly flexible when it comes to repaying debt. Ask about payment plans and minimum monthly payment amounts for your medical bills.  

Negotiate With Hospital/Clinic

If the debt you get is completely unmanageable, you can look into negotiating your medical debt. There are many ways to go about this, depending on the situation. If you haven’t done anything like this before, consider hiring a billing advocate who can do the negotiations for you. 

Crowdfund Your Medical Bills

Another way to pay your medical bills to avoid collections is to look into crowdfunding. Crowdfunding is online fundraising to which anyone can donate. You will have to share some personal information about why you need the money, but it can definitely work. Many Americans have used crowdfunding to pay for their medical bills, and you can get started for free. 

Can Medical Debt Impact Credit Scores | Equifax®
Your Rights and Protections When It Comes to Medical Bills and Collections | Consumer Finance Protection Bureau
How to Fight Back When Contacted by a Debt Collector for a Medical Bill | Consumer Reports 

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