- All medical collection agencies must be HIPAA, FDCPA and GLBA compliant. Without these compliance, they cannot pursue collections.
- If a patient disputes the debt or asks for proof of debt owed, a collection agency must provide adequate documentation, else stop collecting the debt.
Credit Reporting Changes as of July 2022 and April 2023
- Paid medical debt: Collections that have been fully paid no longer appear on credit reports.
- Collection waiting period: Unpaid medical debt now must be in collections for at least one year before it can be reported to credit bureaus. This gives you more time to resolve the debt before it harms your credit.
- Small debts under $500: Medical debt collections of less than $500 will no longer appear on credit reports.
Additional Considerations
- Impact on scoring models: Some credit scoring models, like VantageScore, have completely excluded medical debt in collections from their calculations. This means medical debt can have a reduced impact on patient’s credit score overall.
- State-level regulations: Some states have additional restrictions on how medical debt can be reported, including shorter waiting periods or restrictions on reporting debt for those covered by certain insurance plans.
No Harassment and Intimidation
- Excessive contact: They cannot call patients repeatedly, at odd hours, or contact your workplace if you’ve asked them not to.
- Threats: This includes threats of arrest, jail time, wage garnishment, or any action they don’t have the legal power to take.
- Abusive language: They cannot use profanity, insults, or personal attacks.
No Misrepresentation
- Pretending to be law enforcement or government agents: This is a serious offense.
- Misrepresenting the amount owed: Inflating the debt or adding unauthorized fees is illegal.
- Lying about their identity or the nature of the debt: They must be truthful about who they are and the debt they’re collecting.
No Unfair Practices
- Contacting third parties: They generally cannot discuss your debt with employers, family, or friends (unless you provide specific permission).
- Publicly shaming you: Posting about the debt on public forums or otherwise trying to embarrass the debtor is prohibited.
- Suing patients for a time-barred debt: There are statutes of limitations on medical debt, and they cannot legally pursue debts beyond that time frame.
- Reporting the debt to credit bureaus without first attempting to collect from the debtor: They must make good-faith efforts to collect directly from you before negatively impacting the patient’s credit report.