Medical Debt: A Changing Collections Area

In today’s world, people struggle with all kinds of debt. One of the most common types of debt, however, is medical debt. Many people though, including members of the media and lawmakers, have zeroed in on the fact that medical bills are often incredibly high and hard to pay, especially for someone who is ill or facing other challenges. As such, many are pushing for tighter laws on how collection agencies can contact consumers about medical debt and about just how hard they can push when it comes to collecting on these debts.     

Because of all of this talk and discussion of medical debt collections and the problems and issues related to it, collections agents should expect to see some changes in the medical debt collections field in the near future.

Credit Reporting Changes

In the past, debt collectors could “get to” those who owed medical debt by reporting their delinquency to the major credit reporting agencies, which had an adverse impact on the debtor’s credit and would sometimes urge him or her to pay If possible.

Now, though, the major credit reporting agencies have developed the National Consumer Assistance Plan, which allows for those with medical debt to avoid adverse credit reporting for 180 days from the day their account is created to the time a debt can be reported. Furthermore, paid medical debts can be erased from the person’s credit history.

The support of debtors by the credit reporting agencies has made it more difficult and less worthwhile to report medical debts, so, in the coming months and years, collection agents can expect to see fewer instances of reported late payments and a reduced sense of urgency on the part of the consumer.

While this might seem like a bad thing as far as debt collectors are concerned, it can actually help them to improve customer relations by seeming less “threatening” to debtors, which can improve the chances of regular payments being made on the debt.

A Gentler Approach

In this day and age, when any person can share his or her experience with a debt collector via social media, hospitals, private practices, and more are being extremely careful about providing good experiences to their clients. This means that, even when they do have to turn clients over to collections, they will want to ensure that their clients are treated kindly and gently, in spite of the fact that they haven’t paid their debts.

While this might seem counter-intuitive, modern day practices don’t want to risk a bad reputation by being associated with the actions of their debt collectors, so debt collectors will likely be instructed, more and more often, to take a kinder, gentler approach to the collection of debts.

Big changes are in store when it comes to medical debt, but all debt collectors can do is change and adapt with the times and figure out a way to come out on top, no matter what.