The Treasury Department and IRS have adopted rules and regulations addressing aggressive hospital bill collection brought by nonprofit hospitals. Previously uninsured patients would be billed at the full, ‘rack rate’ posted by the hospital. If you had insurance, the insurance company received a big discount from the hospital when it paid its bill. Most often, only the poor and uninsured paid the vastly higher rate for services. This was an enormously unfair result, the poorest actually paid the vastly higher medical rate.
Since 2013 debt collection concerning issues of hospital and medical bills have been the top complaint heard by the Consumer Financial Protection Bureau.
When the uninsured patient failed to pay, the hospital turned up the collection heat and aggressively went after the patient. Tactics included reporting negative information to credit bureaus, garnishing a person’s wages and taking default judgments in court against people.
The new regulations now require nonprofit hospitals to offer such things as discounts, free care, information about applying for financial assistance. A 120 day rule has also been put in place; this means that before the nonprofit hospital can take “extraordinary collection efforts” against someone, it must first work with the person to establish satisfactory amounts and payment plans.
Extraordinary medical bills often are the reason that pushes a person over the financial ledge. Medical crises affects a person’s ability to work whether due to injury or illness; it also impacts a family member as that person can no longer work while taking care of the seriously impaired/injured. People are also emotionally devastated.
If you or a loved one has found himself in this type of situation, a bankruptcy, chapter 7 or 13 may be a course of action that protects you, gives you breathing room and a fresh start. In the Philadelphia area, we are bankruptcy lawyers who can help sort out your situation and provide guidance.
If you are sued by a hospital or have received a court summons about a medical bill, consult with us; don’t wait until a judgment is entered against you. There are defenses a bankruptcy lawyer can offer as well as alternative courses of action. Even if a judgment has been entered against you, you can still use the bankruptcy law to obtain protection from creditor actions.
As you may have realized by reading elsewhere in my blogs and web pages, chapter 7 bankruptcy and chapter 13 repayment plans allow you to stop all creditor action, allows you to keep your home, cars and property and gives you a fresh financial start.
If you have any questions or want to learn more about the possibilities, call for an appointment today to meet with a bankruptcy attorney in Philadelphia. 215-822-2728