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Medical collections, unpaid medical bills, HIPAA laws

Wed Dec 3, 2008 02:12PM | By Tony

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Medical collections have always been treated somewhat differently than other collection categories. Almost everyone I know, and that includes yours truly, gets aggravated when some balance is due after a medical procedure. I personally know several debtors with unpaid medical bills. One fellow refuses to pay any medical bill in principal. Last time checked, he had 8 medical collections totaling some $1,200, ranging from few $15 co pays to $450 balance for an upper gastric endoscopy. His credit scores were way down, but he didn't care. Not a dollar more to those robbers as he put it. Medical collection has always been tricky, but with the HIPAA laws, many debtors find a neat way to remove bad records from their credit reports.

There was a time, when unpaid medical bills totaling less than $400 wouldn't faze even A+ lender. It was not a big deal, as long as your credit scores recovered or weren't hurt too much. Things changed of course, but back to those 'poor' debt collectors. The HIPAA or Health Insurance Portability and Accountability Act enacted by the U.S. Congress in 1996 is being shrewdly used to basically tell collectors where to go. Politely of course but rather firmly. The HIPAA Privacy Rule requires a 'business associate' that could be a bill collector or someone from physician office or a hospital, to reasonably limit the disclosed information to the necessary minimum, and keep debtor stuff confidential. So wording like no permissible business purpose in divulging protected health information to anyone on an account once there is no longer any payment due or please be advised that under Federal Statutes. the Fair Credit Reporting Act, (15 U.S.C. § 1681 et seq) and (your State name)'s Consumer Credit Statutes, you may be held liable for the actions of XYZ collection agency, opens a nice loophole for debtors against collection agencies because debt collectors know next to nothing about laws and industry restrictions, but do know that violating HIPAA laws will be very costly.

So if you are in situation where unpaid medical bills threaten to ruin your credit, try to convince a debt collection agency that by knowing your diagnosis and treatment, they violated your sacred right on privacy. To rectify it and avoid unnecessary lawsuits, the medical collections should be removed from your credit report. Here are few excellent HIPAA letters and instructions.

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