How to Remove Medical Debt Collections From Credit Reports
Medical debt can be a huge problem for those trying to build up their credit scores to buy a home, get an auto loan, or even submit a rental application. Once you receive a bill in the mail (the remaining charge that your insurance doesn't cover), it's important to do what you can to pay it before it goes to collections. If you have run your credit and found a negative collection on your report, it's important to figure out how to get it removed. Read on to learn more!
My Medical Collections Journey
Because of my personal experience, I am pretty dang close to a credit collections expert. I personally had over $80,000 worth of medical debt in collections after a car accident. These bills went to medical debt collection agencies and firms before the litigation was complete. Even though all my medical debts were paid off in my settlement, medical debt collection calls and letters still kept rolling in. This was after the bills had been paid. Over the years, however, with diligence and a little research, I have managed to get all claims removed. How did I do it? A little luck and a lot of research. Hopefully, I can help you get your debts removed too.
In this article I discuss:
- Why Are Paid Bills in Collection Agencies?
- Medical Bills, Collections, and Credit
- How to Run Your Credit Report
- Identifying False Claims
- Catching False Claims
- Refuting False Claims
- What Not to Do
- Writing a Medical Debt Validation Letter
- How HIPAA Works in Your Favor
Why Are Paid Bills in Collection Agencies?
What many people don't know is that hospitals will often sell medical debts to collection agencies—even when those debts have been partially paid! Medical debt collection yields profit for the hospital who sells the debt at a low price, and for the collector who hounds you for the payments.
How do Collection Agencies Work
Collection agencies are third party companies that buy debt from an established business (such as a hospital or a bank) for a fraction of the debt amount. These agencies pursue you for the full amount owed, even though they bought your debt for only a fraction of that. Furthermore, it's been possible for them historically to place the same debt on your credit report multiple times. This is called double-dipping.
What Is Double-Dipping?
Also known as double jeopardy, medical collection agencies do what's called "double-dip" and sporadically hit my credit report for old debts that have already been paid. What this means is, if a debt wasn't paid in a timely manner (which in some cases is quite arbitrary) the collection agency could sell the debt to another collection agency. This results in multiple negative hits to your credit report. Fortunately, a 2015 court ruling changed this; now, legally, a collection agency that sells its a debt to another must remove its unpaid debt from your credit report.
Because my hospital visits took place pre-2015, I wasn't protected by this ruling. Not to mention I hadn't owed money to the hospital to begin with. I ended up finding an easy way to get the medical debt removed. After dealing with double-dipping, money-hungry debt collection agencies, you learn a few things.
Do You Have a Medical Debt That Has Gone to Collections?
Medical Bills, Collections, and Credit
I run my credit reports every year, and you should too. You can obtain a copy from all three credit bureaus once a year. This is where you can make note of all the debt collections, who owns them, and their contact information.
A red flag for me on my credit report was a large medical debt collection from the birth of my son. At the time I was covered with Blue Cross Blue Shield through work, as well as qualifying for pregnancy Medicaid that picked up the balance left by my insurance. There was no way the bill was legit; I did not owe that debt.
When I dealt with that particular debt, I found an easy way to remove medical debts in collection from my credit report.
Initially, I contacted Medicaid, as they should have picked up the balance owed for the medical procedure. They said that without an original bill, they could not assist me. So I sent a very well-written and polite email to the medical debt collection agency. Since I knew Medicaid would pay the debt, I had no fear of contacting the medical debt agency for an original bill.
Two days later I received a reply. The medical debt collection agency informed me they could not provide me with an original bill, and said they had been forced to delete my debt collection account. Something amazing and crazy had happened. The debt quickly vanished off my credit report in less than a week.
The HIPAA Loophole
Somehow I had managed to get a huge medical debt removed off my credit report with ease. Having no clue how I managed it so easily, I did a bit of research. HIPAA regulations in the United States prevent any medical documentation to be shared. That means that when the hospital sold the debt to the medical collection agency or firm that is all they got, just the debt. No information, no details. Just the dollar amount, and the date that it was acquired.
Oh sweet HIPAA regulations! We all sign a HIPAA form when we go to the doctor or a hospital. This form states that we only allow them to discuss our medical information with whomever we put on the form. Well guess what? That medical debt collection agency does not always have permission to access your medical information. So they could not provide the needed information to get the debt paid, once I asked the right questions.
All HIPAA paperwork is not always the same. Depending on how the document is written when you sign off on it prior to getting medical treatment it may include that they can share information. Sharing with certain agents or other medical staff within the building. As with anything that requires your signature fully reading and understanding what you are agreeing to is pertinent. This way you will understand if they are indeed able to share your details with specific entities. Entities that may include those they employ in the pursuit of obtaining the balance owed
More Advice About Dealing With Medical Debt
Since my first successful removal of a collection report, I have learned a bit more about how to dispute medical debts in collection.
I do not recommend sending an email like I did in the story above. Here are some basic rules to follow when dealing with medical debt collection agencies:
- Avoid calling collection agencies.
- Send well-written, non-aggressive letters disputing the debt.
- Send only Certified Mail, with signature confirmation.
- Make copies In triplicate.
- Use a budget planner to track the date you send each letter to each debt collector.
I keep a budget planning notebook. Writing out each individual medical debt and all the information in the ledger really helps you to organize the information you find on your credit report. It allows me to separate the smaller collections from the larger. It also allows me to separate them by date and company. If you have multiple debts going to the same medical collection company you can send multiple letters at once. You will easily be able to mark the collections off when you receive a reply.
Writing a Medical Debt Validation Letter
There are a few thing to keep in mind when sending a medical dispute letter. I got lucky with my first one and they removed the debt. Here are a few things to include in your letter:
- I am requesting that (medical debt collection firm name) provide debt validation for (account number listed on credit report).
- Debt validation in the form of an original bill and detailed statement of procedures is required.
- Debt Validation should be received no later than 30 days from receipt of this request.
- If (medical collection firm name) can not provide adequate validation withing the 30-day time frame, all debts should be immediately removed from all three major credit reports.
- I request all further correspondence regarding this debt collection to be sent via mail. Do not contact me by phone.
Giving the firm 30 days is just polite; you need to at least give them two weeks to meet your demands. Always be polite in any contact with a medical debt collection agency. No need to be rude; more than likely they will be deleting your debt.
Always send letters certified mail with signature required. It may be tempting to just mail a standard letter to a medical debt collection agency, but if you fail to send a certified letter, there is no record of you sending your validation letter, which makes it impossible to prove the debt collector received it.
If you do not receive a reply within the allotted time, you move on to the next step. This is where you need your copies in triplicate, and your certified mail receipts.
Removing Those Medical Debts for Good
Once you have mailed your letters, one of two things will happen: either you will get a letter stating the debt has been deleted, or they will validate your debt. And if your debt is a medical debt, they just stepped in it by validating it!
What to Do When a Medical Debt Is Validated
Now here is where it gets fun: if by chance a medical collection does provide you with the details of your medical bill they are in direct violation of HIPAA regulations, facing fines (payable to you) of up to $1,000.00! Even possible jail time. Send a follow-up letter stating that you know they have directly violated the regulations of the HIPAA Act of 1996. Inform them that you never signed a HIPAA form to authorize them to have access to the information. You may also include that you intend to pursue filing a legal complaint unless they immediately delete this item from your report and stop all attempts to collect. Of course, you want that in writing too.
What to Do If the Medical Collection Agency Fails to Reply
If the medical debt collection agency fails to reply to your letter, you have a bit of work to do. This is where your Certified Mail receipts come in handy, plus those triplicate letters. Now you will compose a letter to all the major credit bureaus: this is why I said "copies in triplicate." You can make copies of your certified mail receipts to send as well.
Your letter should state that you made an attempt to validate a debt on your credit report. Say that you have yet to receive any validation or reply from the medical collection agency, since they have failed to comply with your request, or even contact you. Ask that the debt be immediately removed. It is also a good idea to include your contact information for followup from the bureaus. Be polite: no debt collector or someone at a bureau is going to respond nicely to any hostile letters.
What if the Debt Collector Agrees to Delete My Debt but Does Not
This is approached the same was as failure to reply. In this case you send a copy of the agreement to delete the debt—in addition to all your other paperwork of course.
As Easy as Sending a Letter
Simple as that. A simple well-written validation letter can do a lot of good. Keep in mind that it is possible that a newer medical collection can be sent back to the hospital or doctor that had it to begin with. I have not had that happen personally.
Just make sure to keep up with a budget notebook ledger. Keep detailed notes, and of course the big one 'signature confirmation' on certified mail! Sure it will cost a few dollars worth of postage to get the ball rolling. Well worth it to see your credit score improve when all those old medical debts are removed from your credit report! Every medical debt removed will help to raise your credit scores!
Never deal with any debt collectors over the phone. Even if you pay them, without anything in writing, they do not have to remove the collection from your credit reports. Always deal with debt collection firms via the mail, never on the phone.
I wanted to update with some personal experience with medical debt and data breaches. Over the past few years, I have gotten several letters from medical facilities letting me know that medical providers and insurances I have used in the past have had data breaches.
These breaches compromised my personal information. As a result, I decided to run my credit reports again to look for any issues. As suspected, there were medical debts showing up that had already been paid. These were some of the easiest collections I have ever removed from my reports.
I disputed directly with the credit bureaus by sending the following:
My details have been included in data breaches. I cannot confirm that this debt is valid as it appears to be a debt that was already paid.
Simple yet effective. Within 24 hours I had a response and confirmation from the bureaus that the debts that were in collections had been removed. If you have had your personal information included in a data breach this maybe an option to get duplicate debts removed for you as well.
Keep in mind when sending any form of dispute to credit bureau copying and pasting is never a good idea. Write your disputes in your own words. I often get emails from people stating a dispute was denied. Through corresponding with them I find that they have used a template dispute letter they found on the internet. This is not recommended credit bureaus do use software to check for this, I mean there are so many hacks on the internet why wouldn’t they? So, when you copy and paste one of these premade disputes it flags and results in a denial.
This is not a solution for everyone. As I mention this method worked for me removing duplicate medical debts. If you know the debt is yours, you can work directly with the debt collectors for pay for deletion and negotiate for less than the balance owed in most cases. I have several detailed articles covering many angles of dealing with debt collections.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Questions & Answers
I recently noticed a medical debt collection on one of my credit reports. It is not showing up on the other reports though. Is this worth going through the steps for debt validation and removal since it is only reporting on one of my credit reports and not others? Is it a good sign that it is an inaccurately reported debt since it is only reporting to one credit bureau?
It is plausible it is showing on only one report because the others aren't current. Sometimes a debt only appears on one or two of your credit bureau reports and not the other one. It can still negatively impact credit scores.
Collection agencies don't always report to all the bureaus as many people will pay erroneous debts as soon as they notice them. They make loads of money from people not checking and questioning the validity of collection accounts.
Would I personally work towards validating the debt and pursuing removal? Yes I would. Especially if it paid with insurance coverage, or is a potential an error.
It is completely conceivable it could be off base debt obligation, yet I truly can't address your own obligations and what could be invalid debts for you.
If the debt has any potential in being invalid why would you leave it on any of your credit reports? Collection accounts have negative impacts on credit scores no matter if only on one bureau report or all. You are out nothing but time in trying to get this debt collection removed.Helpful 1
In this article, you said regarding the HIPAA loophole they could not provide necessary info after asking "the right questions". Could you explain what those "right questions" were for the HIPAA loophole?
When I asked them to validate the debt and send any supporting documents for the services this bill was for. The debt collector could not provide details regarding the debt in question without violating HIPPA. When you are dealing with debt collectors you should only provide them with what little details you see on the debt in question as it shows on your credit report. Date of debt and account number listed on your credit report. I have also written a few other detailed articles highlighting how to correspond with debt collectors that you may find useful as well.Helpful 4
I disputed a medical collection through Experian and Experian denied the dispute to remove the debt. The debt is not mine; I have never used the medical service this collection agent is trying to collect the debt for. What can I do to refute Experian's claim to debt?
In this case, it appears you may need to contact the collection agency and attempt to figure out why they are reporting a debt that does not belong to you for services you never used. If a credit bureau denies your dispute it could be in how it was worded, or that not enough detail was included to support the claim of the debt being invalid against whatever documentation the debt collector can provide to the contrary. Also, check into any possible data breaches at the medical facilities you have used. I have found that my information was included in several over the years through medical providers, and it has caused a lot of similar issues for me to deal with.Helpful 3
If a debt collection agency sends me the date of service and how much I owe is that validation?
Under the Fair Debt Collection Practices Act, there are requirements that must be included in a validation letter from a collection agency. Without seeing an actual notice, it is hard to determine if you indeed have a clear validation or not. Though I can say validations should include more than the date and how much is owed.Helpful 3
I have multiple medical debt collection accounts on my credit from a few years ago when I was covered by pregnancy Medicaid with no out of pocket costs. What steps can I take to have these debts removed?
When something like this happens, you need to contact Medicaid (or any insurance company you may have had) and see if you can be provided with supporting documentation that the debts were paid by them. If you can obtain that, then you can dispute with the credit bureaus directly to have them removed.Helpful 2
© 2016 Cynthia Hoover