Medical Debt Collection Laws: What You Need to Know

Oct 23, 2023

In an era where the complexities of healthcare billing have increased, patients often find themselves navigating a sea of medical expenses and insurance nuances. Healthcare providers, on the other hand, grapple with rising patient bad debt due to an uptick in high deductibles and co-pays. Balancing patient relationships with the need for timely reimbursements poses its own set of challenges. Understanding and navigating medical debt collection laws is vital for both providers and patients alike.

The FDCPA: Safeguarding Patients in Medical Debt Collection

The Fair Debt Collection Practices Act (FDCPA) is the primary law that governs medical bill collection in the United States. The FDCPA prohibits debt collectors from engaging in certain practices, such as:

  • Harassing or intimidating patients
  • Contacting patients at inconvenient times
  • Threatening to sue patients or garnish their wages without first obtaining a court order
  • Disclosing a patient’s debt to third parties without their consent

To know more about FDCPA, read our blog on: Fair Debt Collection Practices Act: What You Need to Know

The HIPAA Privacy

The HIPAA Privacy Rule also applies to medical debt collection. The HIPAA Privacy Rule protects the confidentiality of patients’ health information. This means that debt collectors cannot disclose a patient’s medical information without their consent, even if they are owed money.

In addition to the FDCPA and HIPAA Privacy Rule, there are a number of state medical debt collection laws that govern medical debt collection. These laws vary from state to state, so it is important to be familiar with the laws in the state where you practice medicine.

Here are some tips for complying with medical debt collection laws:

  1. Only work with reputable debt collectors: Make sure that the debt collectors you work with are licensed and insured. You should also check to see if any complaints have been filed against them.
  2. Provide patients with clear information about their debts: When you send a patient a bill, be sure to include information about the services that were provided, the amount of the bill, and the patient’s payment options.
  3. Work with patients to develop payment plans: If a patient is unable to pay their bill in full, be willing to work with them to develop a payment plan.
  4. Be respectful of patients’ privacy: Do not disclose a patient’s debt to third parties without their consent.

Navigating this sensitive terrain requires not just legal awareness, but also a compassionate approach. Collection agencies should endeavor to maintain the trust and respect of their patients, even when discussing outstanding debts. 

First Credit Services: Simplifying Medical Debt Collection

First Credit Services (FCS) is a leading name in medical bill collections. We understand the sensitivities around medical debts and have a fresh approach to handling them. Being fully compliant with HIPAA rules and holding national licenses, FCS is all about innovative methods. We’ve spent a lot to develop a platform that focuses on the patient and uses advanced technology to improve customer engagements. By merging technology with a personal touch, we ensure that the communication is kind and understanding.

On top of that, FCS has a special service called the Extended Business Office (EBO). This service helps hospitals and doctor’s offices handle the complex world of insurance payments. Whether it’s dealing with unpaid insurance amounts, sorting out denied claims, or working through appeals, FCS’s EBO is there to assist. This means healthcare providers can save time, spend less, and earn more from insurance.

To know more on Medical debt collection, read: Understanding Medical Debt Collection: A Comprehensive Guide

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