Your medical bill was sent to a collection agency. Now what?

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Your medical bill was sent to a collection agency. Now what?

By Steven Jensen
December 29, 2021

Here’s the typical scenario: You’re in a car accident. You go to the hospital and are charged way more than you expected. You are stuck with a $1,500 bill. Instead of paying the bill, you dispute it. You’re willing to pay some of the amount, but $1,500 is ridiculous. You saw the doctor for 1 minute, and the nurse took your vitals. This amount is not fair.

So, you don’t pay it. The hospital sends you a few overdue notices, but you hope it will go away. Or, you think to yourself, I’ll wait and see if the hospital will take less money down the road. And you kick the can down the road.

What happens if you don’t pay the bill?

The hospital will send several notices before sending the balance to a collection agency. Once the bill goes to a collection agency, the hospital will no longer talk to you about the bill. The hospital will make you talk to the collection agency.

A collection agency gets paid a percentage of what they collect from you. The percentage is usually between 25% to 50%. They want you to pay almost the entire $1,500. If your records show you have money to pay the bill, they are going to keep coming after you.

Some agencies will take a discount on the bill. Whether the agency will take a discount depends on the contract with the hospital.

Negotiate for a discount.

Don’t be argumentative. Stay calm. The agent deals with angry people all day. Be genuinely kind. If you are kind, you’ll get much further with them. Keep an attitude of, “How can I help this agent,” as opposed to, “How can I bully this agent.” Explain your circumstances in sincere detail. As they say honey attracts more flies than vinegar.

To get a discount, make an offer of what you’re willing to pay. This gets the collections agency to start calculating out its commission. Tell them you’ll pay $500 of the bill; this is a reasonable charge for the visit; it’s all you can afford.

The collections agency may then counter and say we’ll accept $1,400 if you pay within 14 days. You can say, the best I can pay is $750, and I can get it to you in 14 days. The agent may say, I can take 15% off or $1,275.

Find specific mistakes or reasons to reduce the bill.

This is where you get patient. Now, you want to request information. You say something like, “I really want to get this debt paid off for a fair amount.” I just need more information to decide why this bill is so high.

Get into the weeds and point out specific mistakes can get you a discount. Remember, you’re still being kind.

Mistakes are common. Request a copy of the itemized billing ledger and the Health Insurance Claim (HCFA) form (HCFA). See the HCFA below. There’s a lot of information that goes on this form. That means there’s room for errors. The billing date may be wrong. Patient information might be wrong. Look for duplicate charges. Look for unnecessary charges. The hospital may have used the wrong ICD code for a type of treatment.

The key is you need real support for why you want to pay less. Saying you just don’t think it’s fair is not going to be enough.

You might explain why bill is too high. It’s been billed incorrectly. You can’t pay it because you are struggling to pay all bills. Maybe you just got a divorce or lost your job. Maybe your daughter just got married and you want to help pay for her wedding. Or maybe you had a terrible customer experience at the hospital.

Whatever the reason, you need to lay it out clearly and specifically.

Top 3 Collection Agencies in Utah

At Parker & McConkie, we deal with collection agencies a lot. The three we seem to deal with the most are MedData, IC Systems, and Express Recovery.

Many Utahns treat at IHC facilities. MedData (formerly Cardon) collects for IHC, so we deal with MedData quite a bit. On average, MedData seems to reduce its bill about 15% from the total. They seem to be the most difficult to deal with. This is reflected in their online reviews.

IC Systems is a large collection agency for many hospitals throughout the United States. They collect debt for many Utah medical providers. They are willing to reduce the bill, sometimes up to 25% depending on the circumstances. If you’ve had a bad experience with IC Systems, you’re not alone. They are known to be aggressive and hard to deal with. Just go look at their online reviews.

Express Recovery, based in Utah, collects debt for many Utah medical facilities, including the University of Utah. They focus on making it a positive experience. They avoid harassment or unnecessary aggression. This is reflected in their positive online reviews. They will typically reduce on a case-by-case basis, between 10-30%.

Impact on your credit score.

The big question: what’s going to happen to my credit score??

Your credit score is effected only when your debt is reported to a credit bureau. Creditors or debt collection agencies aren’t required to report your debt. Just because you’re getting calls from collections doesn’t mean it’s hurting your credit score.

Ask the hospital or collection agency not report your debt. Tell them you’re willing to pay a fair price for the bill, but you just need time to get the money and work out a fair deal. You need time to review the itemized bill, HCFA, and standard local rates for the type of treatment you received.

If they do report your debt to a credit bureau, your credit score can go down. If you already have bad credit or don’t care about your credit score, then this is not a big deal. In fact, tell the collection agency that you don’t care about your credit score. They hate hearing this. The threat of your credit score going down is one of their best tools to get you to pay.

If you have good credit, get the bill paid before it gets reported. There’s no way around this. Even if the debt was in error, it can impact your score for years.

Don’t let the courts get involved. It’s usually not worth it.

If 120 or 160 days go by, and you still haven’t satisfied the debt, the collection agency may send your debt to a lawyer to file a lawsuit. The lawyer must notify you of the specific details of the debt and wait 30 days before filing a lawsuit.

Unless you have a solid defense for not paying the bill (see the link below for a list of defenses), I’d work out a settlement with the lawyer. If you don’t settle, you’ll have to answer the lawsuit. This alone takes several hours. For a full list of possible defenses, go to this link on

If you feel the debt collection agency is harassing you, talk to an attorney that is familiar with the Fair Debt Collection Practices Act. This is the law that sets the rules for the collection agency.

What are your tips or tricks for dealing with collection agencies?

We’d love to hear your experiences. If you’ve been able to work magic and get a steep discount on a bill let us know. Better yet, if you were able to get the collection monkey of your back entirely, tell us about that, too!

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