Medical debt often accrues when dealing with illness or injury. However, even when aware of the cost of care, you are entitled to transparency. U.S. consumer protection laws can guide you in understanding your rights regarding these debts.
Overview of Consumer Protection Laws
Several laws may apply to your situation. Consumer protection laws, in general, are in place to minimize the risk of a debt collector threatening you or otherwise trying to force you into paying a debt that is unfair or unethical in any way.
If the debt is accurate, you may be required to pay the bill. If you fail to do that, the provider you owe the funds to may take steps to sell the debt to a collection agency, and then you are legally obligated to pay that debt to that collection agency. They also have the right to report your non-payment of the debt to the credit bureaus, though they must try to collect this debt from you before doing so.
Beyond this, you have numerous protections that could help protect you from abuses related to their collection actions. Note that all consumer protection laws, including the Fair Credit Reporting Act and the Debt Collection Rule, apply to medical debt as they would any other. That means there are strict requirements on consumer credit reporting and dispute process, and you have the right to be informed about your debts in writing before the collector can contact you otherwise.
Medical Billing and Disclosure Requirements
The place to start is to ensure that costs were shared with you before you received care. In an emergency, no one will require you to sign a form saying you agree to make payment. Still, in nearly all other situations, that's likely to happen. You have the right to:
- Understand if your insurance covers the care you are about to receive
- If the facility may charge you out-of-pocket costs
- And what the estimated costs will be for procedures
These terms fall under the No Surprises Act. This law went into place in January 2022 to ensure that individuals do not receive unexpected bills for emergency services they receive. It also puts in place a patient-provider dispute resolution process.
Fair Debt Collections Practices Act
The Fair Debt Collections Practices Act is one of the most important laws to protect you from debt collectors. It does not eliminate your requirement to pay a debt that is yours, but it does set rules for when and how debt collectors can collect that debt.
They cannot use:
- Threats
- Lies or any deception
- Coercions
- Illegal or abusive tactics
- Harassment
That means that if the debt collector tries to tell you that you have to make a payment right now or the police will come to your home, they are lying to you. It also means that you have the right to fair treatment, such as asking them not to contact you at work because it could jeopardize your position.
Health Insurance Portability and Accountability Act
It's also essential for you to understand your rights under the Health Insurance Portability and Accountability Act. This law, commonly known as HIPAA, provides extensive protections to safeguard your privacy in health matters. HIPAA is a federal law that puts a regulatory framework around who can know about your health care coverage, charges, and medical needs and who cannot.
Under HIPAA, third-party medical providers, including debt collectors, cannot access your private health information. They cannot see what type of care you received and do not have the legal right to communicate anything with anyone other than you about your medical debt.
Bankruptcy Laws
Under U.S. bankruptcy laws, you may have the right to request that the court forgive and eliminate your debt owed for medical care. Medical debts typically are not tied to any collateral, which means that not paying the hospital or doctor bills will likely lead to a discharge of the debt by the court. That means you will unlikely have to repay that debt once the bankruptcy goes through.
Finding Legal Assistance
When you are facing financial difficulties related to medical debt, and you believe that medical debt collectors are mistreating you, reach out to an attorney or financial advisor who can empower you with specific steps to protect your rights. Even if you owe that debt, you still have the right to be treated fairly under U.S. federal law. By taking action to require help, you can protect your financial future.