How Does Medical Debt Collection Work?

Today, medical debt collection faces unique challenges like rising self-pay receivables, increased copays, and healthcare insurance confusion. There are many medical debt collection agencies. The most common method to break down how medical debt collection agencies work is by the age of the receivable. Agencies handling the most recent medical visits work one way, and those managing severely delinquent accounts work another method. Medical debt collection agencies work by factoring four main ideas.

  • Can they contact the debtor?
  • How much money is owed?
  • What is their capacity to pay?
  • What advantage does the agency have?


Medical Debt Collectors

Debt collectors are agencies that specialized in collecting severely delinquent medical debts. Occasionally the receivables are purchased by the agency at a discount off the stated debt amount. The agency is betting that they can collect more than what was paid for the account, and what it costs to collect the cash. Other times the agency is working on a straight percentage of what is collected, and the medical debt provider continues to own the receivable.

Reporting to Bureaus

The instrument in a medical debt collection agency’s tool is the reporting of the debt to the credit bureaus. Somebody with an already low credit score may not be affected very much. A person with a good score and the wish to borrow cash in the future could be adversely affected. Many times people will pay off a medical debt responsibility to keep the matter off their credit report. Once it is reported, creditors see the facts for seven years. Disputing medical collections on credit reports can time to time work. Communication with providers and agencies is the best way for success.

Physician Billing Agencies

Several agencies as the billing section for physicians and hospitals. Debt collector wants to practice medicine and leave the billing and collections work to an agency. These agencies submit claims to the insurance carriers and assistance in adjudicating the claims. Leftover cash is billed to the patient, and the agency follows up to save payment. Since various times these agencies are contacting patients who are still very active with the provider, there is a more friendly and accommodating tone with any correspondence.


Amount of Money Owed

Not every medical debt collection account has the same revenue potential for an agency. The agency spends cash by sending letters. The collection experts are paid to make many outgoing calls. These activities cost the agency cash.

Leverage Over the Debtor

The big prize for medical debt collection agencies is a combination of a large outstanding balance, with a user paying their loan on time. This suggests that the person owns a home, and intends to keep it. Collection agencies find it cost-effective to hire an attorney to attach a lien on the assets. When the person efforts to refinance or sell the house, the medical debt is paid first.

AccuMed Collections is well-versed in medical billing procedures and patient account management. Our prestige is our ability to provide eminent and versatile accounts receivable management solutions.