Approximately 20% of Americans with credit reports have medical debt. Over 70 million Americans go into debt as a result of medical bills. Within Indiana, 48,000 and 64,000 people ages 18-64 have medical debt exceeding $10,000. That means between 1% and 1.7% of people in Indiana have excessive medical debt that may never be paid back. This problem of medical debt is only growing in the United States, leaving the patient, doctors and hospitals suffering the consequences. Medical debt is a significant issue for many consumers. Hospital bills, medication costs, and other healthcare expenses can pile up, especially for those without adequate insurance.
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Even with health insurance, patients often find that their policies do not cover all the costs. High deductibles, copayments, and services not covered by insurance policies can result in significant out-of-pocket expenses.
When an individual owes a certain amount of money that must go towards medical bills, that person is understood as being in medical debt. When that individual’s medical debt obligation grows, with little evidence pointing towards it being paid off, the obligation to obtain the money owed goes to a collection agency. Even though every individual is required to pay their medical debt, laws on the federal level protect debtors under the Fair Debt Collection Practices Act.
Indiana Medical Debt Collection Laws
Indiana’s debt collection laws are similar to the federal laws concerning medical debt. Any medical debt incurred by an Indiana resident is covered under federal and Indiana state statutes regarding debt collections.
For hospitals and doctors looking to recover costs, there is a certain period in which a patient’s medical debt can be legally collectible. Once debts become outstanding beyond the statute of limitations, they can no longer be collected legally. In Indiana, the statute of limitations is ten years. This goes for any written contract stating details of payments to be made.
To collect payment for medical debt, there are also specific rules and practices which must be adhered to. If the medical debt is large, creditors can turn over the case to a debt collection agency. This agency will attempt to communicate with the debtor by phone, email, mail, or fax. They may only attempt to contact the debtor between 8 AM and 9 PM. They are not allowed to call during working hours if they know the debtor’s employer does not allow personal calls.
Within five days of the initial contact a debt collections agency has with a debtor, an official notice must be provided to them. This notice must include a conversation statement, the amount of medical debt the debtor owes, and the parties to whom that debt is owed. It is against the law for a debt collection agency or its agents to act in a harassing or intimidating manner.
Recovering money on the past due accounts of patients can sometimes be challenging. However, some steps can be taken to recover the money debtors owe hospitals, doctors, clinics, and other medical specialists and groups. While using these methods, debt collection requires handling sensitive information in a way that does not breach HIPAA laws and regulations regarding Protected Health Information.