News & Resources

Debt collection laws shift, agencies target scams

Jul 17, 2013 Philip Burgess

Organizations in the healthcare sector hold some of the most sensitive information in the United States and are also among the most active parties when it comes to debt collection. For these reasons and more, debt collection firms and healthcare providers need to ensure that their information governance and data management protocols are superior to those of entities in other industries.

The federal government has increased efforts to boost oversight activity when it comes to medical debt collections and identifying fraudulent schemes pertaining to patient accounts. Healthcare organizations that do not feel entirely comfortable with the laws as they stand, or those that are in the process of being passed, should consider using a seasoned debt collection firm to avoid fines and sanctions.

Fought the law, will the law win?
Forbes recently reported that hospitals and debt collection agencies are increasingly pulling together in a fight to minimize some of the newer laws and regulations being considered by officials in Washington. Instead of simply opposing the passage of new laws that were established in Congress, the two sectors have dreamed up their own lists of best practices which they hope will be treated seriously.

According to the news provider, the Healthcare Financial Management Association and the Association of Credit and Collection Professionals, combined efforts to establish a new entity, the Medical Debt Task Force, which built a set of standards that many believe will be beneficial to patients and medical organizations alike.

For one, the source explained that the Medical Debt Task Force wants medical debts to be removed from credit reports within 45 days of reconciliation. Additionally, all transactions should be reported by hospitals and debt collectors as best practices, especially as this can help strengthen the accuracy of data related to delinquent accounts.

Forbes explained that the cornerstone legislation currently making its rounds through Washington is the Medical Debt Responsibility Act, which includes many of these recommendations from professionals in the healthcare and debt collection industries. One of the other components of the legislation would be a new rule that provides patients with roughly four months - or 120 days - to reconcile debt before the hospital or collection agency can report the accounts as delinquent to major credit reporting agencies.

BBB identifies another scam
The Better Business Bureau recently announced yet another scam alert related to a fraudulent debt collection firm that makes wild accusations and tries to scare businesses or consumers into paying off accounts that were never created. According to the BBB, the National Fraud Investigation Agency has been found to call consumers and businesses, stating that felony charges will be filed should they fail to repay the debt immediately, despite the fact that the account is fraudulent.

Additionally, this serves as a good example of one of the most common signs that a debt collector is not legitimate, as felony charges cannot be filed for such matter under the Fair Debt Collection Practices Act. Businesses should always verify the validity of a collection effort before giving any information or issuing repayments.