The Collection Laws for Medical Bills

Doctors and hospitals are allowed to send patients to collection agencies.
••• doctor"s treatment image by TEMISTOCLE LUCARELLI from

Federal law allows doctors or hospitals to send the overdue bills of patients to collection agencies. But the agencies hired by these medical professionals must follow certain rules when trying to collect on their unpaid bills. It's important for consumers to know these rules; it's the only way they'll know if collection agencies are employing illegal tactics against them.


The Health Insurance Portability and Accountability Act (HIPAA), federal legislation that regulates medical privacy issues, gives health care providers the right to disclose certain information about their patients to collection agencies. The act also gives doctors, hospitals and other medical providers the right to report overdue bills to credit-reporting agencies.

These medical providers are not required to get the consent of patients before referring their unpaid bills to collection agencies.

Disclosing Information

Under HIPAA, medical providers are only allowed to provide certain types of information to collection agencies. This includes the name and address of patients with unpaid bills, their birth dates, Social Security numbers, payment history and account number.

Medical providers are not allowed to share information about patients' medical conditions with collection agencies.

Privacy Rights

The names of some medical providers could provide collection agencies with enough information to guess the medical conditions for which these patients sought treatment. For instance, the name "Fairview Mental Health Practitioners" would give away the fact that a patient was seeking therapy. This issue is addressed in another federal law, the Fair and Accurate Credit Transactions Act. Under FACT, medical providers must mask their names if these names could disclose the type of medical care that patients sought. A medical office named Fairview Mental Health, for instance, might simply be listed as Medical Provider or Medical Office. This helps protect the privacy of patients.

Standard Rights

Patients also receive the same debt collection rights that all debtors receive under the Fair Debt Collections Practices Act. This act forbids collection agencies from using threatening or abusive language, calling at unreasonable hours (though the act doesn't define "unreasonable"), calling consumers' employers or neighbors or insinuating that consumers can serve jail time for not paying their debt.

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