Medical bills can still be sent to collections under current rules

Medical bills collections remain a real risk for patients who leave a hospital with a balance they cannot pay, CBS News reports, even after recent changes to how medical debt is handled on credit reports.

The short version: hospitals can still send unpaid bills to a collection agency in most cases if a patient does not pay or make another arrangement. The process usually does not start right away, according to CBS News, and hospitals often try to settle the account with the patient first.

Can hospitals send medical bills to collections?

Yes. CBS News reports that unpaid hospital bills can be turned over to collectors when patients fail to pay or do not work out a plan for the remaining balance.

Before that happens, many hospitals may offer ways to handle the debt, including payment plans or other concessions for people dealing with financial hardship. Nonprofit hospitals also must follow certain billing and financial-assistance rules before using extraordinary collection actions, including making reasonable efforts to find out whether a patient qualifies for charity care, CBS News reports.

Once a medical bill goes to collections, the agency can generally try to recover the money for the hospital. That can mean calls, letters, payment talks and, in some cases, legal action if the debt is still unpaid and state law permits it, according to CBS News.

What changed with medical debt and credit reports?

The big shift is credit reporting, not the hospital’s ability to seek payment. CBS News reports that the major credit bureaus have changed policies for some medical collection accounts, including removing paid medical collections and delaying when unpaid medical collections can show up on credit reports.

Smaller medical collection debts also tend to carry less weight in credit decisions than they once did, according to CBS News. That can reduce some of the long-term credit damage, but it does not make the bill disappear.

A patient can still get collection notices, face a lawsuit in certain circumstances or deal with more financial pressure if the balance is left unresolved. In some states, unresolved medical debt can eventually lead to wage garnishment, CBS News reports.

What should you do if you cannot afford a hospital bill?

CBS News says patients should act before the account reaches collections when possible. The first call should often be to the hospital billing department, especially if the patient already knows payment will be difficult.

Hospitals may offer low-interest or interest-free payment plans, hardship programs or financial assistance that can lower the amount owed for eligible patients, according to CBS News.

Patients should also check the bill itself. CBS News reports that billing errors, insurance claim problems, duplicate charges and coding mistakes can leave people on the hook for more than they actually owe.

• Ask for an itemized bill.
• Compare it with the insurance explanation of benefits.
• Ask the hospital about charity care or hardship assistance.
• Request a payment plan that fits the household budget.
• Consider broader debt relief if medical debt is part of a larger problem involving credit cards, personal loans or other unsecured debt.

Debt relief companies may offer options such as debt settlement programs, CBS News reports, though those are most relevant when medical bills are one part of a wider debt squeeze.

The clearest warning from CBS News is not to go silent. Responding early can leave more room to negotiate than waiting until collection activity, legal action or other pressure begins.

This story draws on original reporting from CBS News.