Debt Collectors and Medical Bills
Collection of medical debt is a major consumer issue. A recent study by the Federal Reserve Board found that nearly half of all collection actions appearing on consumer credit reports are for collection of unpaid medical bills. http://www.federalreserve.gov/pubs/b...3/0203lead.pdf
May a doctor or hospital refer an overdue medical bill to a collection agency?
Yes. HIPAA, the medical privacy rule that became effective in April 2003, allows a health care provider to disclose information to a collection agency. HIPAA also says an overdue bill can be reported to a credit reporting agency.
Collection of an unpaid bill is considered a payment activity under HIPAA. Thus, it is not necessary that you give your consent before a medical bill is referred to a collection agency or before a negative entry is placed on your credit report. A debt collector would generally be a business associate of the covered entity...
However, you may dispute a medical bill with the health care provider or a collection agency. If you do, the fact that you have lodged a dispute should also be revealed if a negative report is made to your credit report.
Can my medical information be disclosed to a credit reporting agency?
HIPAA says the healthcare provider or health plan may disclose only the following information about you to a credit bureau.
* Name and address.
* Date of birth.
* Social Security number.
* Payment history.
* Account number.
* Name and address of the one claiming the debt.
....For more about medical information and new FACTA rules, see PRC Fact Sheet 6(a), www.privacyrights.org/fs/fs6a-facta.htm#7
Do I have a right to dispute a medical collection?
You can always dispute a medical bill with your healthcare provider or health plan. You can also dispute inaccurate information included in your credit report. For more on disputing inaccurate information in your credit report, see the FTC publication, How to Dispute Credit Report Errors,http://www.ftc.gov/bcp/edu/pubs/cons...edit/cre21.htm
However, we know of no national law that provides standards in disputing medical bills. The federal Fair Credit Billing Act (FCBA) only applies to open-ended credit accounts such as credit card accounts and revolving charge accounts like department store charge accounts. (15 USC §1601)
For more on when the FCBA applies, see the FTC's publication "Fair Credit Billing," http://www.ftc.gov/bcp/edu/pubs/cons...dit/cre16.shtm
, as well as the text of the law, www.ftc.gov/os/statutes/fcb/fcb.pdf
There is a dispute procedure you can use if the debt is referred to an outside collection agency. When this happens, a medical bill, like any other debt, is subject to the FDCPA dispute procedures. For more on filing a dispute under the FDCPA, see Part 7.
To learn more on disclosures to collection agencies and credit bureaus by HIPAA covered entities, see PRC Fact Sheet 8a, "HIPAA Basics: Medical Privacy in the Electronic Age," www.privacyrights.org/fs/fs8a-hipaa.htm#7