Request to Validate Medical Debt

[Your name]

[Your address]

[Address of collection agency]

[Date]

Amount of debt: [ ]

Date of Service: [ ]

Provider of Service: [ ]

Dear collection agent,

I received a bill from you on [date] and as allowed under the Fair Debt Collection Practices Act (FDCPA), I am requesting that you allow me to validate the alleged debt. I am aware that there is a debt from [name of hospital/doctor], but I am unaware of the amount due and your bill does not include a breakdown of any fees.

Additionally, I am allowed under the Health Insurance Portability and Accountability Act (HIPAA) to protect my privacy and medical records from third parties. I do not recall giving permission to [name of provider] for them to release my medical information to a third party. I am aware that the HIPAA does allow for limited information about me but anything more is to only be revealed with the patient’s authorization. Therefore my request is twofold—validation of debt and HIPAA authorization.

• Please provide breakdown of fees including any collection costs and medical charges.

• Provide a copy of my signature with the provider of service to release my medical information to you.

• Cease any credit bureau reporting until the debt has been validated by me.

Please send this information to my address listed above and accept this letter, sent certified mail, as my formal debt validation request, which I am allowed under the FDCPA. Please note that withholding the information you received from any medical provider in an attempt to be HIPAA compliant can be a violation of the FDCPA because you will be deceiving me after my written request. I request full documentation of what you received from the provider of service in connection with this alleged debt.

Additionally, any reporting of this debt to the credit bureaus prior to allowing me to validate it may be a violation of the Fair Credit Reporting Act, which can allow me to seek damages from a collection agent. I will await your reply with above requested proof. Upon receiving it, I will correspond back by certified mail.

Sincerely,

[Your Signature]

[Your Printed Name]

Certified mail No: [ ]

https://strikedebt.org/drom/appendix-c/

Medical Debt: America’s Sick Creation

What Is Medical Debt?

If you’re having trouble paying medical bills, you are certainly not alone. About 62% of all personal bankruptcies in the United States are linked to medical bills, and three-quarters of those bankrupted had health insurance when they got sick. That’s about one medical bankruptcy every ninety seconds. This is not surprising when we consider that seventy-two million people in the United States have trouble paying medical bills.

Individuals accrue medical debt when they are charged for, but don’t or can’t yet pay for, out-of-pocket expenses charged by the hospital, clinic, or doctor (provider). As soon as you pull out the plastic and put it on your credit card—something strongly advised against when trying to manage medical bills—it becomes personal or consumer debt.

There are many ways you can incur medical debt. According to the American Journal of Medicine, “among medical debtors, hospital bills were the largest medical expense for 48%, drug costs for 19%, doctors’ bills for 15%, and insurance premiums for 4%.” A grim reality in the United States is that when it comes to health care, you are often faced with taking on debt or losing your life. Every year, forty-five thousand people die preventable deaths because of lack of health insurance.

We’re All at Risk

Almost everyone is affected by medical debt. The for-profit health care industry is designed to benefit a few at the expense of the rest. Debtors and non-debtors alike are forced to pay out-of-pocket for everything from basic care to life-saving operations. As patients, most of us understand instinctually that someone is making out like a bandit when we get sick. This becomes clear the minute you walk into a doctor’s office or a hospital where you open your wallet to make an upfront payment, sometimes called a copay, before even seeing a doctor. The costs can start piling up from there, even if you have insurance.

If you have a serious illness or accident, it’s unlikely that your insurance will cover all—or even most of—the care you need. What insurance doesn’t pay, you’re responsible for. Predictably, medical debt discriminates along familiar lines. Low-income people, who are disproportionately people of color, are the most likely to incur medical debt. Astonishingly, more than half of working-age Blacks (52%) report problems paying medical bills, in contrast with 34% of Latino/as and 28% of Whites.

Pay More, Get Less

People in other wealthy countries have no concept of medical debt. That’s because they have a system of universal health care that spreads risk across the population. U.S. health care does exactly the opposite; the financial burden is placed on the most vulnerable individuals, while the cost of care increases and coverage becomes skimpier. Health insurance is supposed to guarantee that you get the care you need without going bankrupt, but in the United States, it may very well do neither.

The World Health Organization places the United States health care system first in spending (per capita) and thirty-seventh in quality of care. Spending was estimated at over $8,500 per person (or 17.9% of the GDP) in 2010. At the same time, the United States ranked last among high-income countries on amenable mortality—that is, deaths that could have been prevented with access to effective health care. The reason is that private, for-profit insurance companies dominate the U.S. health care system. One out of every three health care dollars is spent on advertising, underwriting costs, and lavish payouts to executives and shareholders, but not care. To give you an indication of the profit-seeking mentality at the root of this problem, the “loss” in the common insurance industry term “medical loss ratio” refers to the money that is spent on care instead of profits. In the eyes of insurers, providing care becomes an unfortunate cost of doing business.

How to Better Understand Medical Bills

Hospital bills”

When you receive a medical bill:

• Keep every bill.

• Separate doctors’ bills from the hospital’s bills. Not every service provided during your hospital stay will be included in the hospital’s bill.

• The origin of the bill is a significant factor in determining whether you’re entitled to a discount.

• Different account numbers on the bills may help indicate the different providers.

• Ask the hospital’s billing office for an itemized bill. This bill will separately list all hospital charges. You have a right to know what you’re being charged for.

• If you have trouble understanding which services you’re being charged for and by whom, call the telephone number listed on the bill to help clarify.

• If you’re insured, review your insurance policy to better understand the expenses for which you are responsible versus those covered by the plan.

• In addition to making sure you receive coverage that you’re eligible for, avoid putting medical bills on your credit card. Doing so converts your medical expenses to consumer debt, which puts you in an even worse place. Having credit card debt instead of medical debt likely means greater fees and penalties, and greater difficulty securing a job or mortgage.

You can challenge your hospital bills for many reasons:

• If you believe the bill was not calculated correctly.

• If you believe you’re being charged twice for a single service.

• If you believe your insurance—either public or private—should have covered some or all of the charges for which you are being billed.

Private insurance bills

If you get insurance through your employer, or buy it on the individual market, be careful about referrals! Sometimes patients admitted to an in-network hospital by their in-network provider incur huge bills as a result of out-of-network referrals during their hospital stay. This is because commercial insurance plans do not require their in-network doctors to refer patients to other in-network doctors.

If you have a plan with limited out-of-network coverage, or with none at all, tell your doctor not to refer you to out-of-network doctors. Ask each specialist who treats you in the hospital whether they accept your health plan. Anesthesia bills can be very costly; request an in-network anesthesiologist who accepts your plan and ask to have this request written in your chart.

How Much does Medical Debt Affect a Report?

Until a few years ago, it affected it about the same as any other debt on your credit report. In September of 2017, however, credit reporting agencies have to wait a minimum of 180 days before reporting your medical debt.

Additionally, the three main credit bureaus changed their algorithms to recognize the special significance that medical debt has with consumers. Essentially, they realized that people will almost always put themselves in debt to get medical care for themselves or loved ones, regardless of their ability to repay.

Thus, listing medical debt with other inquiries was not a true representation of a consumer’s likelihood to repay a loan. After all, that’s the point.

Validate

If you know that you do not owe the debt or can’t find information to prove that you do, you should consider disputing the entry. You can do this by asking for proof of the debt.

The Fair Debt Collections Practices Act (FDCPA) requires that credit and debt collectors provide the amount of the debt, the name of the original credit, and a statement verifying the debt owed. Collectors must provide this within five days.

Collectors must be able to validate the debt in order to collect it. If they’re not able to do this, removing the medical debt from your credit report is made much easier.

Running the Clock

Even after your debt falls off your credit report, you could still be liable to repay it. This is because collection agencies have a statute of limitations in which to collect the debt.

This means that it is entirely possible that you will never have to repay the debt if collections agencies do not collect it in time. There’s a negative side to this, however.

If you make even a partial payment or simply verbally confirm that you owe the debt, the statute of limitations (in this case called time barred debts) can be reset. State laws vary on both the time necessary and the reset process. Determining the age of your debt can help you determine when and even if you have to pay.

Even though medical debt can adversely affect your credit report and score, they are treated differently than other debts. Therefore, it is reasonable to be a bit more flexible with how you pay them back. If, for example, you have a mortgage and an auto loan, it probably makes more sense to pay those before your medical debt.

Removing medical bills from your credit report can be a difficult process, but it can help boost your score and keep you on the path forward.

How Long do Collections Stay on Credit Report?

Understanding how long collections stay on your credit report is an important way to begin the process of rebuilding your credit. It’s never ideal to be stuck in collections. You want to avoid it at all costs.

A collection notification on your credit report is severely damaging. It can result in your inability to get other credit. That includes a mortgage or car loan. The best way to avoid collections is to budget appropriately and live within your means.

However, if you do unfortunately get stuck in collections, understanding that your report will reflect that action for seven years can help you retool your financial future.

We researched & reviewed the best credit repair companies. They can help you dispute inaccurate items on your report & work towards improving your credit score.

What is collections anyway?

Collections is simply the action of attempting to collect a debt. You’ve borrowed money from a lender, either for the cash itself or for an item like a vehicle. You are expected to repay it.

When you do not pay on it for a certain period of time, the lender can initiate a collection action. That means they can forcibly attempt to get the money from you. This force comes in a variety of different forms, from phone calls to repossession.

The original credit sometimes has its own collections department. More commonly however, the original lender will sell your debt to a company that specializes in collections.

The original lender will only get pennies on the dollar. That is because of the difficulty the collector may have getting the money from you.

So how long will it be on my report?

A collection action will remain on your credit report for seven years from the initial date of the action itself. That means if you enter collections for a loan on January 1st of 2018, that collections action will appear on your report until 2025! Your credit score will also take a fairly substantial hit.

Companies generally treat all debts the same. That is the case whether they are medical, home or other types of loans.

The credit bureaus have recently augmented how they handle medical debts in their credit scores. That means your score will not drop as much as would another type of debt.

This is because both lenders and credit bureaus understand that, whether consumers can pay back the money or not, they are highly likely to take on medical debt. However, the collection action will still remain on the credit report.

So what do I do?

The best thing to do is work with your lender before you enter collections. The lender will lose money if they have to sell your debt to a collections agency.

Their interest is in having you repay the full amount of the loan. As such, they are very likely to work with you in the form of reduced payments, a longer term or other measures.

If you do find yourself in collections, speak with the collection agency that owns your debt. Ensure you understand what you owe and when.

If there is any error, ask for a debt validation letter. This means that the collections agency must produce proof that they own the debt and that the debt is, in fact yours.

Next, make the payments. The faster you take care of the collection action, the better off you are.

Finally, ask if the collections agency can petition to have the action removed from your credit report. They might be able to do that after you complete repayment. (But before the seven year period expires.) This doesn’t always happen, but it’s worth asking.

Statute of Limitation On Medical Bills

Debt never dies. It can be forgotten and its impact may lessen over time, but it’s important to remember that just because you don’t feel or see the debt, that doesn’t mean it’s gone.

After a certain period of time, usually seven years, most debts will fall off your credit report. But that doesn’t mean it goes away. The debt still exists – it simply isn’t being reported by the credit bureau anymore, and is therefore no longer visible to anyone looking at your credit report. It should also cease to impact your various credit scores at that point.

When the statute of limitations on your debt expires, that doesn’t mean the debt goes away, either. It just means that you are no longer legally responsible for the debt. There’s an important distinction to keep in mind here – you can still be sued for the debt. If the statute of limitations on that particular debt has expired, it would be your responsibility (or your attorney’s responsibility) to notify the court that this has happened.