In the wake of growing concerns about healthcare, lawmakers are working to create legislation governing the way healthcare providers collect debts. Providers and debt collectors are aware of this push, resulting in a joint effort by the two largest organizations behind these professions to create proposed best practices for collecting debt incurred from medical expenses. Those two organizations recently presented the proposed standards to members. A Medical Debt Task Force made up of representatives from both of these organizations, medical providers, credit bureaus, credit agencies and patient advocate organizations created the proposal, which will not be mandatory but is expected to become standard.
The proposed practices include allowing 120 days before reporting a delinquent medical bill and the removal of paid medical debt from credit reports within 45 days. All transactions, including payments and partial payments, will be reported to credit bureaus.
While these practices benefit patients, healthcare providers are increasing their collection efforts in other ways to combat a growing trend toward nonpayment of medical bills. Healthcare providers will continue to collect debts that are owed to them. Healthcare providers are expected to require more point-of-service payments. Consumers should be prepared for healthcare providers to begin requiring full payment in advance of treatment and asking patients to make payments early in the treatment cycle, in many instances while still in the hospital. The number of patients who refuse to pay medical bills, even those who have insurance and the ability to pay, is expected to continue to rise.
Patients facing unmanageable debt due to medical expenses can seek relief under U.S. bankruptcy laws. Surgeries and unexpected medical conditions can cause medical debt to quickly mount. Bankruptcy protection can provide relief to patients who are unable to meet the obligations of medical debt.
Source: Forbes, "Hospitals And Debt Collectors Race To Head Off Medical Bill Collection Laws, Regs", Evan Albright, July 03, 2013