You can get sued if you have unpaid medical bills. This doesn’t mean that you’ll automatically lose or don’t have legal rights. There are also a few things that might happen before a potential lawsuit.
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Do hospitals and doctors have a right to sue for unpaid medical bills?
Hospitals and doctors generally have a right to sue for unpaid bills. It’s similar to how you can be sued if you don’t pay a contractor who works on your home.
That doesn’t mean that people don’t rightly have concerns about the affordability of medical care and whether people should have to go into medical debt. But if you do have outstanding medical bills, it’s important to understand how the system works.
Some states might restrict when and how healthcare providers can sue for medical debt. Your insurance company may also have restrictions that the healthcare provider has to follow as a condition of accepting that insurance.
Will you always be sued for unpaid medical bills?
Having medical bills doesn’t guarantee that you’ll be sued. Different hospitals and doctors have different policies.
Some providers might always sue for unpaid medical bills. It’s also common for unpaid hospital bills to be written off by large hospitals.
In addition to their right to collect, healthcare providers also think about the cost of collecting. Lawsuits can be expensive, so it often won’t be worth suing except for large medical debts.
Doctors may also avoid suing because they’re worried it could result in negative online reviews. Finally, they also recognize that if you couldn’t pay your outstanding medical debt, you probably won’t be able to pay a court judgment, either.
Do medical bills go to collections?
It’s common for medical debts to go to collection.
Many medical practices only handle initial billing in their internal collection department. They contract with a debt collection agency to handle bills that go unpaid for a certain amount of time.
In many cases, you may not even realize you’re dealing with a debt collection agency at first. While people think of debt collectors as people who call you non-stop to threaten your credit, they’re really just contracted customer service workers.
When a medical debt collector first contacts you, it’s usually to ask whether you can pay now or want to set up a payment plan. These types of medical debt collections generally won’t end up on your credit report.
Debt collectors typically have to try to work with you before they can put a medical debt on your credit report.
Do medical debts hurt your credit report?
Recent changes in federal law and credit reporting practices mean that medical debts often won’t hurt your credit score and may not even show up on your credit reports at all.
This will include certain paid-off medical bills and recent unpaid medical bills. Some smaller medical bills may never be reported at all.
Will a medical debt collector sue you?
When a debt collection agency takes over your medical debt, it generally has the same right to sue you as the healthcare provider you went to. Debt collection agencies have almost the same legal rights as when a healthcare provider uses its own internal collection department.
Again, this does not guarantee you will be sued for medical bills.
It’s common for a debt collection agency to pay pennies on the dollar for unpaid hospital bills. It’s often not worth their time to do much more than call you and send you letters.
Of course, the larger your medical debt is, the greater the chance it will be worth it for the debt collector to sue you.
What should you do if you can’t pay your medical bills?
If you can’t pay a medical bill, it’s generally best to contact the hospital or doctor you went to first. You can often get on a payment plan without having to worry about dealing with a debt collector.
Many hospitals and other large medical providers have financial assistance programs. You can often apply to have your medical debt reduced or even erased simply by showing proof of your income.
Don’t forget to ask for an itemized billing statement before you pay. Medical providers often find errors or realize they can’t prove charges when you force them to give you a proper bill.
What should you do if you’re sued for medical debt?
If you’re sued for medical debt, you almost always need to respond one way or the other. If you ignore a court summons, you will often automatically lose the lawsuit.
There are several possible defenses to a lawsuit for hospital debt.
You never received specific services.
The bill includes balance billing that’s not allowed by law or your health insurance policy. Balance billing is when you’re billed for what your health insurance company didn’t pay.
The debt collector violated your rights.
The lawsuit wasn’t filed properly or is otherwise legally invalid for technical reasons.
It’s too late to sue you (after the statute of limitations).
- If your insurance company gave you bad information about your coverage, you may still be liable to the healthcare provider but may want to look into whether you can sue your insurance company for false information.
If you’re served with a lawsuit, you may want to contact your health insurance company first. If the medical bill violates their policies, they may ask the medical provider to withdraw the lawsuit.
If you’re not able to work things out with the medical provider or your insurance company, you may want to hire a lawyer. While you can represent yourself in court, medical debt lawsuits are often won and lost on legal technicalities.
If you can’t afford to pay attorney fees, there are often free non-profit legal clinics that represent low-income patients in medical bill lawsuits.
What happens if you lose a lawsuit?
If you lose a lawsuit, you will typically receive a court judgment against you. If you’re not able to pay, you may be able to get on a payment plan.
In some cases, the judge may order a wage garnishment against you.
Can you go to jail for medical debt?
You’ll almost never go to jail just because you have trouble paying a debt. Debts are generally a civil matter.
You can be charged with a crime if you commit fraud or related offenses. For example, if you write a bad check to a doctor who requires you to pay in advance for an elective procedure, you could be charged for writing a bad check.
The distinction is that you’re not being charged because you owe money but because you committed some other criminal offense.