Medical debt collection has become big business, with care providers filing hundreds, and sometimes thousands, of lawsuits to collect unpaid medical debts.
What many people do not know, though, is that hospitals may not be allowed to sue you for those debts. Under the Affordable Care Act (a/k/a “Obamacare”) nonprofit medical facilities have limitations on what steps they can take to collect medical debt.
Any nonprofit hospital covered by the Act must have a “Financial Assistance Policy” that applies to all medically necessary or emergency care, and the policy must be “widely publicized,” and provide you with all information necessary to take advantage of the policy. At a minimum, the policy must be on the facility’s website and available in the hospital.
Hospitals are prohibited from charging people covered by the Financial Assistance Policy more than they generally bill others.
And, most importantly, hospitals face limitations on what efforts they can make to collect on their bills. The hospital must notify you of their Financial Assistance Policy before taking certain collection actions, and cannot initiate those actions until at least 120 days from the date of first billing after discharge. The hospital must give you a reasonable opportunity to fill out the application, and make a determination on the application before taking certain collection actions. The hospital must suspend certain collection activities during the time the application is pending.
If there are “multiple episodes” of care (such as readmission) then the 120 days begins to run from the first billing after the final discharge.
Hospitals must provide you at least 30 days’ notice before they take certain collection actions, including a deadline for when they might start to take those actions.
Hospitals and debt collectors might violate state and federal laws if they do not follow these steps, and as a result may be prohibited from collecting the bills, or even owe the patient damages for harm caused by improper collection. If you are facing collection efforts on medical bills or any other debt, call Lawton & Cates attorneys in Madison for a free consultation with one of our consumer protection attorneys. Or visit our law firm Madison WI for a consultation.