How to Fight Back When Contacted by a Debt Collector for a Medical Bill

    Here's what one consumer and a CR reporter learned when dealing with a collection agency

    Rolls of printout of calculations with a medical sign and growth line Illustration: Israel Vargas

    When a collection agency contacted Lauren MacNeill earlier this summer saying she owed $71 to an urgent care center near her Westport, Conn., home, she was tempted to just pay the bill to get the company off her back. But one thing stopped her: “I’d never been to that doctor’s office,” she says. 

    So instead she contacted Consumer Reports, since we sometimes help people in predicaments like hers, and I was put on the case. Six weeks—and a flurry of phone calls, emails, and even certified letters later—MacNeill and I found that her case was a textbook example of why you should almost always push pause when contacted by a debt collector for a medical bill.

    More on Medical Bills

    Ultimately, we were able to trace the problem back to a bill MacNeill had received almost a year earlier from an urgent care center, AFC Urgent Care, for her son’s COVID-19 test. That bill had surprised her. For one thing, the test had been at a local church, not AFC Urgent Care. For another, the bill said her insurer, Anthem, had denied the claim because her son was not covered by her policy—even though he was on her plan. MacNeill had immediately called the urgent care center and left a message informing them of the error. After not hearing back, she had assumed the matter was settled. 

    Instead, the bill had ended up in the hands of a debt collector, Eastern Account System, which MacNeill promptly called. 

    “At first, I was like, ‘she’s so helpful,’” MacNeill says of the person who answered the phone at the collection agency. “But then I realized they’re not here to fix it, they’re just here to like, collect the debt, and it is wrong.” 

    So MacNeill and I hit the phones, first calling the insurer, which said they had no record of the claim, and then the urgent care center, which said she had a zero balance. 

    Armed with that information, she sent a certified letter to Eastern Account System documenting the alleged errors that had landed her in this situation, and stating that she therefore was in no obligation to pay the bill.

    The company has not responded to MacNeill, or to CR’s request for comment. But Billy Howard, the managing attorney for the Consumer Protection Firm, a law practice based in Tampa, Fla., that specializes in debt litigation, says sending that certified letter should help shield MacNeill from the debt collection agency.

    Common and Costly Errors

    MacNeill is one of an estimated 43 million people who get contacted by debt collection agencies for unpaid medical bills each year. In fact, they are the most common reason collection agencies contact consumers—affecting 1 in 7 adult Americans, according to the Consumer Financial Protection Bureau. Like MacNeill’s, most of these bills are less than $500. 

    Many of those collections, also like MacNeill’s, stem from mistakes. Almost half of all medical bills contain at least one error, according to Caitlin Donovan, a healthcare policy expert at the Patient Advocate Foundation, a nonprofit group that helps patients negotiate their medical bills. Some collection efforts even come from companies that engage in dubious practices, such as continuing to press for payment on debts after being informed that a bill was paid, or that outright break the law by, for example, trying to collect on an amount greater than the original bill. In fact, consumer problems with debt collection and medical bills are among the top consumer complaints to the CFPB.

    “Between high deductibles, copays, and confusing insurance coverage, not to mention possible billing errors, medical debt poses a unique problem for consumers,” says Syed Ejaz, financial policy analyst at CR. “It’s no wonder so many wind up in collections and affect people’s credit reports and scores.”

    In an effort to address these problems, earlier this year the three big credit bureaus—Equifax, Experian, and TransUnion—announced that they would change how they handle medical debt on credit reports. Specifically, medical debt that was in collections but is paid off will be removed from a person’s report. And new, unpaid medical bills reported to credit agencies won’t be added to a report for 12 months, vs. the previous six months—long enough for people to address the problem. And beginning in the first half of 2023, bills less than $500 won’t show up at all. 

    But these changes won’t eliminate all the problems. “Just because credit reporting has changed doesn’t mean the medical bill disappears,” says April Kuehnhoff, an attorney at the National Consumer Law Center who focuses on consumer medical bills. “Debt collectors can still contact you.”

    Here, we offer tips on how to handle dubious collections and instances where you might not need to pay at all.

    What to Do When You’re Contacted by a Debt Collector

    First, never pay right away. After all, the collection effort could stem from a mistake made by the healthcare provider or insurer, or even be fraudulent. In addition, the problem is rarely as urgent as the collection agent may make it sound, Howard says.

    On the other hand, never ignore the collection notice, either, says Avi Grunwald, CEO of Fair Capital, a debt collection agency. If you do, the debt in question could ding your credit score by 12 points or more, despite the recent changes made by the credit bureaus, according to the CFPB. That’s because while the bureaus did extend the time you have to address the problem, after 12 months your credit score could still be affected. 

    Instead, here is what you should do when you get contacted by a collection agent about medical debt.

    Gather as much info as you can. If a debt collector gets you on the phone, don’t hang up, Howard says. Instead, jot down the name of the collection agency and the person you’re speaking with, plus their phone number, address, and email. Also get the name and contact information of the healthcare provider that says you owe them money, the date and amount of the bill, and any other details you can. Simply “asking all these questions can deter a phony debt collector from contacting you again,” Howard says.

    And if the call is legit, you will need that information to check for errors. If you get a notice in the mail or by email, scour it for details, then contact the company for any missing information. 

    Ask the debt collector to send verification of the debt. Within five days of making that request, the collection agency is required by law to send you a letter that lists your rights as a consumer and provides key details about the supposed debt, including the name of the creditor and the amount they claim you owe, Howard says. Legitimate collection agencies will help validate the debt, Grunwald says.

    File a dispute within 30 days. Once you have the verification letter, you have 30 days to dispute the debt in writing, either via email or certified letter. (The NCLC has a great sample letter.) Keep a copy of the correspondence and send it certified, Howard says, because debt collectors may lose the dispute letter. 

    By law, the debt collector must then stop all collection attempts, and send you additional information about the debt, such as the original invoice, as well as provide a response date. And if the collector does report the debt to the credit bureaus, the reports should show that you are disputing it. One possible bonus of disputing: The collection agency may stop pursuing you, Howard says.

    If you do not dispute the debt within 30 days of receiving the verification letter, the collection agency will assume the debt is valid.

    Make sure the money owed is listed as medical debt. The new changes from the medical bureaus keep only unpaid medical bills out of your credit report, not other kinds of bills. So your credit score is in jeopardy if your medical bills have been mistakenly characterized as, say, credit card debt or a car loan, says Bruce McClary, senior vice president of membership and communications at the National Foundation for Credit Counseling. 

    If your bill is improperly characterized, contact the credit bureau and the debt collection agency and ask them to correct the error. If they don’t or refuse, file a notice with the CFPB. The CFPB will send your complaint directly to the company. 

    In addition, leave a comment in your credit report explaining that the item in collections is disputed medical debt, so anyone who reviews your credit report has a better understanding of your circumstances. (To do that, look for the Personal Consumer Statement option at Equifax, and in the Disputes sections of the Experian and TransUnion websites.)

    When to Not Pay Medical Debt to a Collector

    In some cases you might not need to pay the debt collector or the debt at all. They include:

    The debt isn’t verified. If you don’t receive a verification of the debt after asking for it, or are not sent additional information after filing a dispute, you are not obligated to pay the debt, Howard says. “Until they send that validation letter, they are prohibited from making any further contact.”

    There is a mistake. If you do receive a verification letter and additional information, check it carefully. “Don’t pay if you don’t owe it,” Howard says. Gather any documents to show that the bill was sent to the wrong person, you never received the care, or you already paid the bill. Send copies of paid invoices or other documentation by registered mail to the bill collector, Howard says. And if the collector is trying to collect for more than the amount due, don’t pay “one penny extra,” he says. 

    Your insurer has no record of the claim or hasn’t yet paid. Sometimes healthcare providers fail to submit claims to your insurance company, so bills that the insurer should have paid end up with you instead, says Grunwald at Fair Capital. So call your insurer to see if they have a record of the claim, and if not, call your healthcare provider and tell them to file a claim. 

    If your insurer did receive the claim but denied coverage, ask why, and, if necessary, file an appeal to get the care covered. “It could simply be that the provider didn’t capture all your insurance information while you were in the office, or that a mistake was made while putting in the claim, which resulted in a denial,” says CR’s Ejaz. 

    Either way, send a certified letter plus any supporting materials to the debt collector once the claim goes through your insurance and the debt is no longer owed.

    You have a zero balance with the healthcare provider. Contact the doctor or hospital that says you owe them money to make sure you have an outstanding balance. If that creditor says you have a zero balance, ask them to contact the collection agency to let them know. Get it in writing for your records, too, and send a copy to the debt collector by certified mail. One exception: if you have a zero balance because the provider sold your debt to the collection agency. (To find out, ask the provider.) In that case, the debt is likely real and you need to pay, CR’s Ejaz says. 

    The debt is expired. Some states say that debts older than a given number of years—typically between two and six—are considered expired. After that, a debt collector can no longer take you to court to collect the money. Paradoxically, if you do make a payment on old debt, Howard says, you may “revive” it and be back on the hook for it (known as “zombie debt”). That’s another reason you want to verify that you owe a debt before you start paying. 

    Note that, in Texas at least, you have another level of protection: You might not have to pay if your medical provider does not bill you within 11 months of when you got care. If you get a bill after that, contact the medical provider and send a certified letter to the debt collection agency.

    When to Delay Paying Medical Debt

    Sometimes, even when your debt is legit, it can be a good idea to delay paying. Consider doing so if: 

    You have other priority bills to pay. It’s almost always best to first pay bills that ensure you can stay in your home or apartment, drive your car, or pay for utilities or groceries, according to the National Consumer Law Center. Plus, past due credit card, car loan, or mortgage payments that damage credit scores are likely to be reported much sooner than a medical debt, which now won’t be reported for at least 12 months, says Kuehnhoff at the NCLC. 

    The debt is less than $500. Starting in the first half of 2023, unpaid medical bills less than that amount will no longer be included in credit reports. While it’s still important to pay those debts, this change can mean they are less of a priority for people struggling to make ends meet, Kuehnhoff says, unless you need to see that medical provider again soon for ongoing care. 

    The debt is to a nonprofit hospital and you are un- or underinsured. These hospitals typically have programs that can help people cover medical bills, says Jared Walker, founder of Dollar For, an organization that helps patients apply to these programs. “Nonprofit hospitals are required to have charity care or financial assistance policies, basically as a way to prove to the IRS that they’re providing enough community benefit for their nonprofit status,” Walker says. “But most of them just don’t tell you about it.”

    If this is your situation, he suggests going to Dollar For to start the process of applying. One sure way to apply, Walker says, is to print it all out and send the application certified or overnight mail, so you can be sure it’s received. Dollar For has helped patients get more than $15 million in medical bills forgiven by nonprofit hospitals.

    The debt collector was hostile or threatening. Under the Fair Debt Collection Practices Act, Howard says, you can sue debt collectors if they engage in certain behaviors, including: 

    • Using obscenities, racial slurs, or other harassing language.
    • Impersonating an attorney or a government official.
    • Threatening to sue, arrest, garnish wages, or repossess your property.
    • Threatening physical harm to you or your family.
    • Asking for nontraditional forms of payment, such as a gift card.
    • Calling past 9 p.m. or before 8 a.m., or making more than seven calls within seven days.
    • Contacting family members or your employer to discuss your debt.

    Don’t pay your bill until the suit has been settled: If you win, Howard says, in some states, the financial reward may be enough to cover your medical bill.


    Lisa L. Gill

    As a dorky kid, I spent many a Saturday at the Bloomington, Ind., public library, scouring Consumer Reports back issues for great deals. Now, as a (much) bigger kid, that's still my job! Identifying products and services, especially in healthcare, that are safe, effective, and affordable—and highlighting those that aren't—is my top concern. Got a tip? Follow me on Twitter ( @Lisa_L_Gill)