The California medical debt collection process is one that many professionals aren’t eager to face. Dealing with unpaid patient bills isn’t one of the perks of becoming a medical expert, however, it is a mandatory one in order for practices to remain successful.
California Medical Debt Collection Statistics
Over 40 million Americans have accrued medical debt in one form or another. It is estimated that over one trillion dollars are owed to the medical profession as a result of unpaid medical expenses.
As the most populous state in the country, California gets hit hard when citizens fail to pay their medical bills. It has the highest debt in the country behind New York and Texas. To date, medical debt in California has surpassed $4.6 million dollars.
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California Collection Medical Laws
California has done its due diligence to make sure that patients can receive medical treatment, regardless of their monetary stature. For instance, some patients may be eligible for payment plans without interest, and there is a cap on the amount that a patient can be charged as determined by California’s government-sponsored health care programs.
In the state of California, the statute of limitations for breach of a written contract (i.e. the medical bill) is around four years. After this time period has passed, health care providers are at liberty to seek payment from patients via a California medical collection agency. However, there are certain stipulations set in place on the patient’s behalf. A hospital may not seek claims before a five-month negotiation period, which is when both parties may determine a payment plan.
Under state law, California medical debt collection agencies may not harass, threaten, mislead, or use abusive language in order to obtain overdue medical payments. They also cannot garnish wages unless the case has been taken to court and this method has been approved by a judge.
Credit reporting can be done only after the debt is 180 days old and must be removed from the patient’s credit history report once the debt is paid off by him or the insurance company.
Problems Faced Doctors and Hospitals in California
These protections for patients have created many problems for California doctors and hospitals. In 2016, California passed a law to eliminate “surprise billing” which ultimately made it unlawful for doctors to tack on extra charges after the patient has been discharged. This benchmarking process has doctors fearing the imminent closure of more and more hospitals. Doctors have also suffered from being let go from their insurance companies and have seen a subsequent pay decrease from hospitals.
California Insurance Information
California’s Medicaid program is referred to as MediCal. It gives the necessary monetary assistance for individuals who are
- Low Income
- Pregnant women
- Foster Care
- Diagnosed with diseases such as cancer, HIV, or tuberculosis
The California Health and Safety Code enforces the rules and regulations regarding charging patients and governing collection agencies. They ensure that a patient cannot be billed more than the amount set by MediCal. Medical providers may not turn away uninsured patients but instead, must offer them hospital charity care, payment plan options, and/or use reasonable care to determine if their health care provider can cover their expenses.