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Can I Stop a Medical Bill from Going to Collections?

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Unexpected medical bills can often lead to crippling debt. And if you’re not able to pay the debt, it can lead to even more complications if the debt is sent to collections, as is the case for a Credit.com reader who recently sent in this question:

I am in need of some advice. A little over four months ago my daughter had a check up with her cardiologist, all went well, thankfully. Her initial bill was roughly $1,300. The contractual adjustment between the billing company and our insurance provider was $965. I started paying the remaining balance as soon as we received our first bill. I have been sending $150+ for the last three months. I have also been receiving calls 2-3 times a month from the billing department’s office telling me that I need to either pay in full or set up auto payments. I have repeatedly explained that I cannot set up auto payments because we don’t get paid the same day every month and it just isn’t an option for us. Neither is paying in full. I have brought the balance down to $550 as of the end of June and I received a call today saying the account was going to be sent to collections and that I would receive a letter in the mail soon with the information! Can they actually do that?! My husband and I have very good credit and do not want this to stain our credit reports! We have NEVER missed a payment! This is the only medical bill that we have had issues with, so I’m not sure what to do at this point. Any help or advice is appreciated.

Unfortunately, the provider/collector doesn’t have to agree to accept monthly payments and in many cases, they prefer full payment over monthly installments. Legally, they are within their rights and can send the account to collections if the bill isn’t paid according to the initial terms that were signed and agreed upon prior to the procedure. (Typically, it’s the form we sign claiming responsibility of the debt in the event our insurance doesn’t cover the procedure.)

I know it’s frustrating that they won’t work with you, especially after you’ve made the $150 good faith payments each month, but if they were once willing to work out payments with a recurring auto-billed payment schedule, it would be worth contacting them to see if doing so would keep the account from going to collections. If they agree, I’d even go so far as to set up recurring auto-payments to go to a credit card (at least for the next five months until the debt is paid) to avoid having the account go to collections. Worst case, you’d have the ability to pay the credit card bill when you get paid so that you’re not having to worry about your auto-payment conflicting with the dates you get paid. If they agree to this, make sure you get the agreement in writing so that there are no misunderstandings going forward.

Fortunately, the remaining debt isn’t in the thousands or tens of thousands of dollars range that often force consumers into taking drastic measures (like bankruptcy) because they have no way of ever paying the debt. In the end, with a remaining balance of $550 it’s best to do whatever you can to keep the account from going to collections — even if it means paying the remaining balance on a credit card and then making the payments to the credit card for the remaining time.

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  • http://www.credit.com/ Credit.com Credit Experts

    Meg – a lot will depend on the provider/hospital you’re dealing with, their individual policies, whether or not they send their collection accounts to a external vendor, the amount in question, etc. Not all providers/billing depts/collectors act the same way, but legally — even with you paying a min. amount, if the provider wanted you to pay more and wasn’t satisfied with the amount you were paying, they could turn it over to collections. Fortunately, in your case, the provider/hospital/ is fine with your payment efforts. Still, it’s definitely something to at least be aware of. Others, unfortunately, haven’t been as fortunate.

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  • Bill

    You are assuming this person has credit cards. $550 or 1 million are the same to most middle class people

  • Pam

    I have a medical bill from an accident and have regularly paid and they have cashed my $100.00 payment every month. I got a letter in the mail and a phone call telling me they don’t want payments. This is after 5 checks have been cashed! They turned the bill over to a credit debt collection agency. Now they are telling me that I have to come up with the balance to keep them from reporting it to my creditors! I have worked diligently to get my credit straight and have kept it that way for 10 years. How can they do this? Confused!

    • http://www.Credit.com/ Gerri Detweiler

      I wish I knew what to tell you. i am not aware of any prohibition against it. This article discusses it: Four Medical Bill Myths That Can Cost You Dearly It’s possible you have an implied contract but you’d need to consult an attorney to find out. You might try your state attorney general’s office as well.

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