The Do's and Don'ts of Medical Debt Collection: Insights from the Front Lines

A few years ago, I received a call from a debt service company. Given that we were considering replacing our current debt collector, I decided to hear them out.

The representative was from an international company. He mentioned that he also does business in Brazil. He shared some intriguing practices they were exploring to encourage bill payment in the Brazilian market:

1. Text message collection: They were sending and collecting payments via text, a practice now common in the US but novel a decade ago.
2. Social media peer pressure: This controversial method involved posting about unpaid debts on individuals' Facebook pages to leverage social pressure for payment.

As a new revenue cycle leader, I found these techniques exciting—until I learned they weren't legal in the US at the time.

When collecting medical debt, revenue cycle leaders must know and follow applicable laws. Here are some fundamental rules:

• Credit reporting: Medical debts can only be reported to credit bureaus after a 365-day waiting period from the date of first delinquency.
• Credit report removal: Paid medical debts must be removed from credit reports. Unpaid medical debts under $500 cannot be included.
• Debt verification: Consumers have the right to request debt verification within 30 days of first contact by a collector.
• Communication limits: Debt collectors can't contact debtors at inconvenient times/places and must cease communication upon written request.
• No harassment: Collectors are prohibited from using unfair, deceptive, or abusive practices. Providers cannot use the threat of withholding further treatment as leverage.
• Itemized statements: Consumers have the right to request an itemized statement of medical services provided.

If you are involved in Medical Debt collections, make sure you are doing it right.? According to the Consumer Financial Protection Bureau, they are looking into Medical Debt collection companies and focusing on those that are collecting inflated charges.? To me, this means that they probably are objecting to attempts at collecting the Gross Price. You may want to consider knocking amounts down to a Medicare allowable or something more reasonable than the chargemaster amount.

If you are a Provider and unsure if your RCM company is doing it right, get in touch and I might be able to help!