What is Medical Debt Collection?

Patrick Roland

Medical debt collection is the practice of getting former patients to pay long overdue medical bills. Debt collection is utilized by nearly every type of medical provider, often with in-house workers or by debt collection agencies. Either way, these professionals understand the types of debt collection and the various laws protecting patients, and they excel at locating debtors and providing them with debt repayment plans.

Several countries have laws in place to protect debtors' rights.
Several countries have laws in place to protect debtors' rights.

When a patient has made no attempt to pay a bill and is uncooperative with the institution that has sent the bill, medical debt collection might be utilized. Collectors usually are not called until all other billing methods have been attempted. Hospitals, doctor's offices, chiropractors, psychiatrists, dentists and ambulatory services all use collections to settle medical debts. Many larger organizations have collectors on staff to deal with these patients, but some smaller offices use a private debt collection agency to retrieve the money. Often, a debt collection agency is given a percentage of the money owed or, in some cases, actually purchases the debt from the hospital for less than the total amount owed, so it can make a profit by collecting the larger sum.

Debt collectors are usually a last resort.
Debt collectors are usually a last resort.

Medical debt collection professionals use a variety of tactics in order to locate individuals and get the payments back on track. When individuals cannot be found, collectors must look at tax records, examine bills and interview acquaintances in order to find a current residence. These collectors often spend a lot of time on the phone, calling debtors to inform them of what they owe and ways to repay. If individuals are uncooperative, personal visits also might be used to encourage repayment. Finally, if the debt is sizable enough, the collector's information and testimony can be used to sue the debtor for the unpaid medical bills.

There are many laws in place to protect the individuals who owe money. Collectors must understand these laws and work to ensure that they are not broken when collecting bills. Every country has its own laws and regulations, and some places, such as the United States, have different laws for different jurisdictions within the country. For example, the U.S. state of Connecticut has its Protections for People with Medical Debt act in place to lay out the rules for medical debt collection, interest rate caps and court hearings. Other states have their own laws.

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