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Healthcare industry quick to farm out medical debt

Medical debt is a real burden for many Americans. As the costs of health care have increased and insurance companies have decreased coverage, the problem has been growing. Experts say that the average American household of four had over $20,000 of healthcare costs in 2013. For those who have the insurance coverage and disposable income, these costs are not ruinous. For many families, though, this just isn’t the case.

Part of what makes the problem worse is that the healthcare industry is well-known for quickly sending unpaid bills off to collection agencies. Once that happens, the patient has already taken a credit hit and now has to deal with potentially aggressive collection tactics. In some cases, the debt may be in dispute, such as when the hospital charged the patient incorrectly and sent the bill to collections before the dispute was resolved; or when the patient’s insurance company wrongly refuses to meet their obligations. 

The problem is significant enough that patient advocates have attempted to come up with best practices that can be followed in the industry to make things easier on patients. Last year, the Healthcare Financial Management Association and ACA International met to do just this. Their proposals are not binding on hospitals and collection agencies, so it is up to the industry itself to take or leave them. It is hopeful, however, that efforts are being made to suggest better practices so that patients do not have to unfairly deal with collection agencies over their medical debt.

Medical debt, of course, is among the leading causes of bankruptcy in America. A variety of circumstances can lead to crippling medical debt. Whatever these circumstances might be, it is important for patients dealing with this situation to know their options for debt relief when their situation gets out of control. 

Source: Fox Business, “How Long Does it Take for a Medical Debt to Go to Collections?,” January 15, 1015. 

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