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Created By : Amy Nickson
On 18th Apr,19
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Are you facing trouble paying your hospital bill? Has your hospital filed a lawsuit against you? If yes, then you must be worried about your medical debt. But, each problem has a solution, and this is not an exception. However, to give a medical debt a miss, you have to be aware of your rights. Otherwise, you’ll never be able to defend against aggressive collection practices.

The guidelines and your rights are described in a simple way so that you can understand them easily and take the right action. If you’re still unable to deal with aggressive medical debt collection practices, then you can call 800-530-OVLG.

When can you be sued for medical bills?

When you have unpaid bills, the accounts department of the hospital tries to contact you for payments. If you don't cooperate with them, then they can take a few measures to collect payments:

  1. They can assign the account to the internal collection department.
  2. They can assign/sell the account to a debt collection agency.

Usually, hospitals sell unsettled accounts to a third-party collection agency when the internal collection department fails to receive payments from you. The third-party collection agency will contact you and demand for payments. If you can’t or refuse to pay a single penny, then they can file a lawsuit against you.

The hospital itself can also file a lawsuit against you. However, if your unpaid bill amount is only $1000, then the hospital may not sue you since the legal expenses can be more than that. The attorney fee is likely to be between $200 and $400 per hour. Even if the court issues judgment against you, the hospital is less likely to make any profit because of the attorney fees. Usually, it takes a few weeks to resolve a lawsuit. In that case, the attorney will make a profit than the consumer.

What to do when you’re summoned to court for medical bills

First of all the hospitals should file a summons to start a court case. The hospital should send the copies of the summons to you in person or by mail.

Once you receive the summons, you should take the following steps -

  • Don’t overlook the summons.
  • See the deadline and the instructions given by the court.
  • If you get the summons in person, then you should answer the summons within 20 days.
  • If you get the summons by mail, then you should answer it within 30 days.

How to answer a summons for medical debt

  • You can say that the charges are not correct, or you can’t afford that high charges.
  • You can claim that your income is low, and the hospital didn’t provide you any financial support.
  • You can assert that due to some other complexities, you should not be only responsible for all the bills.
  • You can inform that you never got any notice from the hospital.
  • You can defend yourself by saying that you were eligible for Medicaid, but you never got help from the hospital for the application.
  • You can say that the hospital asked you for more documents and told that the application was rejected.
  • You can notify that the hospital failed to generate a proper bill, according to your insurer.

What if you lose by default

In case you don’t file a response, then the hospital will win the case as a default judgement. Then you have the only option that is filing an order to show cause. That means you have to face the judge and explain the whole matter. Thus, you have to prove that:

  • You didn't receive any papers from the court or from the hospital.
  • You thought that your insurance company paid the bills.
  • You were not well on the mentioned day.

See also: Medical debt declines: Days of financial distress are now numbered

Can you go to jail for not paying hospital bills?

When collection agencies aren't able to get a penny from you, they can take legal action against you. We have already discussed it before. But can you go to jail after being sued for medical bills?

The honest answer is 'no.'

You won't go to jail for not paying hospital bills. Medical bills are civil debts. As per the law, you can't be sent to jail for not paying medical bills.

Is there any exception?

In certain states like Illinois, Ohio, Missouri, Pennsylvania, debt collectors are using a new strategy to put debtors in jail when they don’t pay hospital bills.

When a debt collection agency files a lawsuit against you and wins the case, the court will order judgment against you. The collection agency can garnish your wage or levy your bank account. If you don’t have any income or assets to be garnished, then they can request the court to ask you to appear for debtor's examination.

If you don't show up in the debtor’s examination or give a reply, then the court can issue an arrest warrant against you. Once you’re arrested, you'll be put in jail and stay there till you pay a bond. Unfortunately, the bond is fixed in an amount that is equal to the judgment amount.

Before you jump into any conclusion on medical judgments, let me remind you of one thing. You’re not going to jail for unpaid medical bills. You’re going to jail for ignoring the court order.

How to deal with hospital bills in collection

When your hospital bills are in the collection, they appear on your credit report and hurt your FICO score. This reduces your chances of qualifying for credit cards and loans. If you’re planning to apply for a credit card or a loan, then you should take prompt steps to safeguard your credit score.

Here’s how you should deal with hospital bills in collection.

  1. Read your bills properly: Check your bills and calculate the total balance due. Is the amount correct? Have you been billed for the right items? Check if the hospital has billed the insurance company for the appropriate services. Find out why the insurance company didn’t pay the medical bills.
  2. Ask for proper validation of debt: Too many questions on your mind? Ask the collection agency to validate the debt in writing. Get everything verified before you pay a penny to the collection agency.
  3. Settle your medical debts: Do you know that hospitals have different pricing structure? If the hospitals have charged you $1300 for bandages, then you can always argue with them. If you can’t do that or don’t have the confidence of doing it, then call (800)-530-OVLG to settle your debts quickly. Our attorneys know all the state laws, federal laws, and your rights. Plus, they have good negotiation skills. So they can help to bring down your total balance.

Many hospitals count on the lack of awareness of the consumers. They count on the fact that consumers don’t know what they are billed for and they take advantage of that situation. Fortunately, attorneys know all the laws. So neither the hospital nor the collection agency can fool them. An attorney can negotiate for the items on which they have been overcharged. They know how to negotiate medical bills in collections very well.

Can a hospital turn you away for unpaid bills?

Hospitals can turn you away for unpaid medical bills. Often patients are not aware of the fact that they have unpaid bills. They live on the assumption that the insurance company has paid off the bills. But the reality is something different.

When these people go to the hospital next time, they are turned away due to their past due medical bills. Hospitals inform them that unpaid bills are in collections and they can’t offer any services until you clear your debts.

According to the FINRA Investor Education Foundation study, 1 in 5 people with medical insurance has unpaid hospital bills. Most of them receive collection calls. Sometimes, consumers attend those calls. At other times, consumers don’t receive those collection calls assuming they are wrong numbers.

Medical debts are unexpected and unplanned. These are actually emergency debts. So many people argue that consumers shouldn't be turned away by the hospitals. After all, where would people go if they have an accident?

The law states that people can’t be turned away for emergency care fees. But the law doesn't specify that people can’t be turned away for unpaid hospital bills. So you can’t force a hospital on this issue.

Know your rights: Medical bill payment plan laws

(a)The deposit amount is based on your ability to pay

(b)The amount should be included in the charges allowed under HFAL.

(a)You can file a complaint if you think you have been denied for the care due to your inability to pay.

(b)Try to contact New York State Attorney General’s Health Care Bureau.

  1. It has been seen that uninsured patients are asked to pay more than a patient who have insurance. But, according to the New York’s Hospital Assistance Law (HAFL) law, 2007, if a patient's income is below 300% of the Federal Poverty Level (FPL), then that patient should not be charged more than what the hospital would charge a health insurance company.
  2. You may be asked to pay upfront for the hospital before the admission. Pre-admission deposit is under the HFAL law, but, you have to check:
  3. As per the Law, the hospital can’t turn you away if you’re unable to pay the emergency care fees.
  4. In case you’re unable to afford the pre-admission deposit, then you can talk with the hospital to pay only 10% of your monthly income as a deposit. Not more than 10%.
  5. You can consider other payment option like Medicaid or Supplemental Security Income (SSI). The fund will be given by the charitable organization and foundations.
  6. You can make an inquiry about the payment option before incurring substantial expenses. You can ask your doctor as well.
  7. You can file a complaint if your rights have been disobeyed.

Know your rights: Hospital bill collection law

Sometimes, collection agencies harass debtors unethically. You should know your rights to avoid the harassment. The Fair Debt Collection Practices Act, a federal law, prohibits collection agencies and attorneys from aggressive collection practices.

If the collection agency does any of the above mentioned acts, then they’re avoiding the rule. Thus, you can ask them to stop the harassment by sending a cease-and-desist letter. If the agency still harasses you, then you can file a complaint with the New York City Department of Consumer Affairs and the New York State Attorney General’s Office of Consumer Frauds and Protection.

Collection agencies can't:

  1. Call you before 8 am or after 9 pm.
  2. Contact you at your workplace after informing that your employer disapproves it.
  3. Contact your family, friends, relatives, or others anything (that you owe money) except your work and address.
  4. Threaten you to harm your reputation.
  5. Threaten you to deduct money from your paycheck.
  6. Threaten to sue you without the permission given by the hospital.
  7. Threaten you to seize your property.
  8. Make any wrong statement. e.g. You’ll be arrested, and your family members will be taken away.
  9. Give you harassing calls after sending a cease-and-desist letter.

Read more: What are the collection rules for medical debts?

Know your rights: Garnishment of your wages

Garnishment against the wage means, an automatic deduction of a certain portion of your medical debt goes directly to the hospital. If the hospital wins a judgment against you and your earning is more than the minimum wage, then the hospital can place a garnishment against your wages. But,

  1. The hospital cannot garnish more than 10% of your total income.
  2. The hospital cannot garnish your wage if your weekly income is less than $240 after tax and social security deduction.
  3. Your employer is not allowed to fire you because of the matter.

FAQ - Medical debt collection and lawsuits

Q: What happens if I don't pay my medical bills?

Ans: When you have outstanding medical bills for a long time, then hospitals may assign the debt to a collection agency. In most states, hospitals can't charge interest on medical bills. But they can send your bills to a medical debt collector, who can file a lawsuit when he is unable to get anything from you.

Q: When are your medical bills in collections?

Ans: When you can't pay hospital bills for several months in spite of repeated reminders, your bills are sent to collection agencies. If hospitals have internal collection department, then unpaid medical bills are assigned to them first. When they fail to recover debts, your bills are assigned to a third-party collection agency.

Q: What happens when medical bills go to collections?

Ans: When medical bills go to collections, the debt collector reports them on your credit report. Medical collection accounts appear on your credit report and hurt your FICO score. It doesn't matter if you're making minimum monthly payments.

Even if you pay off bills with a medical debt settlement program, the updated account status will be there on your credit report for 7 years and 180 days from the first date of delinquency.

Q: What to do if a debt collector sues you

Ans: When a medical debt collector files a lawsuit, you can take the following steps to deal with it:

  • Answer the summons within the deadline, typically within 20 days
  • Arrange all your documents and file paperwork
  • Contact a medical bill lawyer to know about how to beat a debt collector in court.
  • Prepare your defense, know the medical bills minimum payment law, and the debt collection laws.
  • Have long discussions with an attorney on how to win a debt collection lawsuit and save money.

Q: What to do when I am unemployed and can't pay bills

Ans: Things are tough when you're unemployed and can't pay medical bills. However, there are a few options you can try out. You can take advantage of various financial assistance programs that hospitals offer. You can also apply for Medicaid. Check out the eligibility criteria from here. If both the options don't work for you, then you can apply for charity care programs. These programs help individuals who don't qualify for Medicaid and Medicare.

Q: Can you sue a hospital for overcharging?

Ans: Depends on how much you have been overcharged? If you have been overcharged by only a few hundred dollars, then why would you pay expensive court fees for such a small amount? The best option is to contact the hospital official who can correct the medical bill. If the hospital official refuses to cooperate, then you can consult a medical bill lawyer.

Q: Can collection agencies charge interest on medical bills?

Ans: As per the law, collection agencies can't charge interest on medical bills. The original contract doesn't talk about any interest rate. So, medical bill collectors can’t charge any additional interest rate.

Q: How to find medical bills in collections

Ans: Look at your credit report. If you find hospital bills on credit report, then it means that your medical bills are in collections. Debt collection agencies report delinquent debts to credit bureaus. So you’re most likely to get the contact details of the collection agency from your credit report.

Q: Can medical bills go against your credit?

Ans: Fortunately, the Consumer Financial Protection Bureau has instructed FICO to consider hospital bills differently from other types of unsecured debts. Usually, medical debt doesn’t hurt your credit score. But when you refuse to pay medical bills, they go into collections and are reported to credit bureaus.

You're more likely find hospital bills on credit report when they are delinquent for more than 180 days and are assigned to debt collection agencies. Once you start paying medical bills over time and finally get rid of them, they affect your score less.

Past due medical bills hurt your FICO score by 50 to 100 points. So, if you have past due bills in collection, then try to pay them off as soon as possible.

Q: Is there any way of paying hospital bills making small payments?

Ans: Debt consolidation programs can help you pay medical bills through small monthly payments. When you enroll in these programs, the debt counselors help to simplify your payments and pay medical bills over time. They also help you get rid of other charges on your bills. Know more about debt consolidation.

Q: How can a medical bill lawyer help with a dispute?

Ans: A medical bill lawyer knows all the rules and regulations. If the hospital has overcharged you or given you a wrong bill, a lawyer can help you to dispute the charges. The US healthcare system is quite complex and difficult to navigate. The medical bill lawyer can help you to fight with providers tactfully.

Apart from tackling a dispute, a lawyer can help you in paying medical bills in collections. He can negotiate with a collection agency and help you in settling medical debt.

Q: Can medical bills garnish wages?

Ans: Can hospital bills garnish wages? The short and simple answer is, 'yes'.

Hospitals have to obtain a judgment in order to garnish your wage. Usually, hospitals don't have time to file a lawsuit against you. That is why, in most cases, they assign the task to collection agencies.

The collection agency has to file a lawsuit against you in the county where the debt originated. Once they get the case number and the trial date, they are required to send you a notice within 3-4 weeks of filing the lawsuit. If the collection agency wins the case, then the court will issue a judgment against you.

Once the judgment order is issued, debt collectors have to wait for 15 days before filing the garnishment together with the declared amount and employer's contact details. The local sheriff serves the garnishment order to your employer.

Final thoughts

Remember, nobody is allowed to break the law. If you know your rights, then you'll be able to stand up for yourself. Stay updated and keep all the documents with you. However, you should contact a lawyer before taking any crucial step.

Last Updated on: Thu, 18 Apr 2019