Can a Hospital Send You to Collections If You Keep Making Payments?

It is not true that making partial payments on a hospital bill will keep you out of default. Here’s what you need to know to protect your credit and steps to take if you simply cannot pay.

Dear Steve,
My daughter recently had a stint at a hospital leaving her with a $2000 co-pay. She is a single mom with a poverty level income. She has been paying $50 a month on this debt.

The hospital called her today saying that $50 a month wasn’t enough. She said that it was all she could do and it was her understanding that as long as she was paying something, they could not turn her over to collection. She was told that was incorrect.

Then she was told they could arrange a loan for her with their credit union, and with that loan, they could write off 10% to help cover part of the interest charges. My initial reaction is that he was not being truthful with her about not being able to turn her in if she is making payments.

I also don’t think it’s legitimate to force someone to get a loan through their facility to pay off debt to them that she is trying to pay off on her own without incurring more debt. Any advice you can offer will be greatly appreciated.
Thank you,
Eileen

Dear Eileen,
Sadly, it is not true that making some payment will keep you out of default. That is an old myth.

Ultimately, the acceptable payment plan is the one agreed to when she was admitted. I would bet she signed a statement of financial responsibility as part of the flurry of paperwork for treatment.

That being said, it might be worth it for your daughter to meet with the billing department and talk about if they offer income based discount programs. Some hospitals will write off balances based on the income status of the person. The reason I suggest she talk to them is because I’m not positive if the interests of the person attempting to collect is aligned with the overall policy of the billing department. Some of these discount programs seem to not be available until you ask.

It does not sound as if the hospital is “forcing” her to take out this loan, but they are offering it as an option. Of course, it is yet to be seen if the credit union would actually make the loan or what the terms of the loan would be.

I understand why the hospital is offering a discount of the debt in exchange for the loan, but that seems to be an offer from the hospital and one which you might want to attempt to negotiate if the loan looks like a real solution. You could ask for a 20% balance reduction and see what they say. Maybe you can meet in the middle at 15%.

What we don’t know here is if the $50 per month is even making much progress towards reducing the debt. Are they adding on fees and interest to the delinquent balance? You’d need to look at the billing statement to get some idea.

Additionally, I don’t know if this was a private or public hospital. Some states have billing rules regarding public hospitals. ProPublica reported, “A spokeswoman for the American Hospital Association said it had no comment. But best practices for the industry, set by the Healthcare Financial Management Association, urge hospitals to take steps beyond the new rules to ensure patients eligible for financial assistance aren’t the target of lawsuits.”
Steve Rhode
Get Out of Debt Guy
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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

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• 10 Ways to Deal With an Expensive Emergency Room Bill

Reviewed December 2021

About the Author

Steve Rhode is an experienced debt expert who assist consumers for free to find good solutions for bad debt. He sells no products or services, just provides free assistance through his site at GetOutOfDebt.org.