Approximately 20% of Americans with credit reports have medical debt. Over 70 million American go into debt as a result of medical bills. Within Indiana, between 48,000 and 64,000 people ages 18-64 have medical debt exceeding $10,000. That means between 1% and 1.7% of people living 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 both the patient, as well as doctors and hospitals, suffering the consequences.
When an individual owes a certain amount of money that needs to 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.
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Indiana Medical Debt Collection Laws
Indiana’s debt collection laws are similar to the federal laws concerning medical debt. This means that 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 of time in which a patient’s medical debt is able to 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 10 years. This goes for any written contract stating details of payments to be made.
To collect payment for medical debt, there are also certain rules and practices which must be adhered to. If the medical debt is a large amount, 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 employers does not allow personal calls.
Within five days of the initial contact a debt collections agency has with a debtor, there must be an official notice provided to them. This notice is required to include a statement of the conversation held, the amount of medical debt owed by the debtor, 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 difficult. However, there are steps that 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 which does not breach HIPAA laws and regulations regarding Protected Health Information.