topic Reported Medical Debt in General Credit Topics

Reported Medical Debt

Anovice — Wed, 08 Jun 2022 08:36:09 GMT

The other day, I went to pay my visa on Citi's website and as I always do, I checked my FICO Score. In April, it was 793 and I was shocked to see it dropped to 681 in May. There is a notation that my credit score was impacted by a “derogatory public record or collection filed”. I then pulled my Equifax Credit Report and see a “Collections” notice. I did not get my Experian or TransUnion credit reports but I assume this notice is in those two as well.

In September 2021, I went to the dentist and had a replacement crown. I had a problem with the crown and the dentist did not stand behind his work as promised, which necessitated me to see another dentist at my expense. I continue to have pain and now the only resolution is another replacement crown, also at my expense. Because the first dentist did not perform as promised, I held back the $356 which was the balance. The dentist ended up turning the $356 over to a collection agency who in turn contacted me. I wrote them explaining what happened and that I do not owe $356 as I offset my costs, which exceed $356. The collection agency's notice in my Equifax Credit Report does say “Consumer disputes this account information”, but in the end, my credit score dropped 112 points.

I am at a loss what to do now. I understand that the longer the payment is past due, the more it will hurt my credit score. I read that starting in July, consumers can expect to have paid medical debt erased from their credit reports. But the $356 is not paid, so that is not applicable to me. Should I try to negotiate with the collection agency? But what guarantee would I have that the collection agency would report a “payment in full” or “settled” to Equifax, Experian and TransUnion? And would this be sufficient for the three credit bureaus to remove this notice from my credit report? Should I write the same type of letter to Equifax, Experian and TransUnion that I did to the collection agency, explaining that I offset my costs which exceed $356? I also read that starting January 1, 2023, all unpaid medical debt less than $500 will not appear on credit reports. Is this the same as saying that all unpaid medical debt less than $500 will be removed from credit reports?

Your thoughts on how to best proceed to get this collection notice for $356 off my credit report and credit score back to where it was in April, are very much appreciated.

Thank you,

Anovice

Re: Reported Medical Debt

gdale6 — Wed, 08 Jun 2022 16:06:49 GMT

@Anovice wrote:
The other day, I went to pay my visa on Citi's website and as I always do, I checked my FICO Score. In April, it was 793 and I was shocked to see it dropped to 681 in May. There is a notation that my credit score was impacted by a “derogatory public record or collection filed”. I then pulled my Equifax Credit Report and see a “Collections” notice. I did not get my Experian or TransUnion credit reports but I assume this notice is in those two as well.

In September 2021, I went to the dentist and had a replacement crown. I had a problem with the crown and the dentist did not stand behind his work as promised, which necessitated me to see another dentist at my expense. I continue to have pain and now the only resolution is another replacement crown, also at my expense. Because the first dentist did not perform as promised, I held back the $356 which was the balance. The dentist ended up turning the $356 over to a collection agency who in turn contacted me. I wrote them explaining what happened and that I do not owe $356 as I offset my costs, which exceed $356. The collection agency's notice in my Equifax Credit Report does say “Consumer disputes this account information”, but in the end, my credit score dropped 112 points.

I am at a loss what to do now. I understand that the longer the payment is past due, the more it will hurt my credit score. I read that starting in July, consumers can expect to have paid medical debt erased from their credit reports. But the $356 is not paid, so that is not applicable to me. Should I try to negotiate with the collection agency? But what guarantee would I have that the collection agency would report a “payment in full” or “settled” to Equifax, Experian and TransUnion? And would this be sufficient for the three credit bureaus to remove this notice from my credit report? Should I write the same type of letter to Equifax, Experian and TransUnion that I did to the collection agency, explaining that I offset my costs which exceed $356? I also read that starting January 1, 2023, all unpaid medical debt less than $500 will not appear on credit reports. Is this the same as saying that all unpaid medical debt less than $500 will be removed from credit reports?

Your thoughts on how to best proceed to get this collection notice for $356 off my credit report and credit score back to where it was in April, are very much appreciated.

Thank you,
Anovice

Sue him with the outcome to be 0 owed and the CA recalled from your report. Small claims would be in order here. These wont even be reported starting Jan 2023 per new CRA rules on medical collections $500 or less. Other option is to just pay it with a PFD.

Re: Reported Medical Debt

Anovice — Wed, 08 Jun 2022 18:50:35 GMT

Thank you for your post!

1. What does CA mean?

2. Small clams court is a good option. I can net out the monies and sue him for that amount. Assuming that I win, do I send the judgment to the three credit bureaus requesting the collections notice to be removed from my credit report?

3. While unlikely, if I decide to pay the $356 (what is a PFD?), what are the mechanics of getting the collections notice already in my credit report removed?

4. You said "These wont even be reported starting Jan 2023 per new CRA rules on medical collections $500 or less." Since it is already on my credit report, if I decide not to sue or pay, will the three credit agencies remove this $356 collections notice when the new CRA rules go into effect n January 2023? If so, this is certainly the easiest option.

Re: Reported Medical Debt

Adkins — Sat, 11 Jun 2022 08:11:49 GMT

@Anovice wrote:
Thank you for your post!

1. What does CA mean?
2. Small clams court is a good option. I can net out the monies and sue him for that amount. Assuming that I win, do I send the judgment to the three credit bureaus requesting the collections notice to be removed from my credit report?
3. While unlikely, if I decide to pay the $356 (what is a PFD?), what are the mechanics of getting the collections notice already in my credit report removed?
4. You said "These wont even be reported starting Jan 2023 per new CRA rules on medical collections $500 or less." Since it is already on my credit report, if I decide not to sue or pay, will the three credit agencies remove this $356 collections notice when the new CRA rules go into effect n January 2023? If so, this is certainly the easiest option.

CA - Collection Agency

See a list of common forum abbreviations here: https://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/td-p/88458

Re: Reported Medical Debt

Anovice — Thu, 16 Jun 2022 10:01:58 GMT

I have read a few of Equifax's, Experian's, and TransUnion pieces regarding the new rules for reporting medical collections that are yet to go into effect.

I am not reading that in the first half of 2023 that they plan to remove reported medical collections debt under $500 from their credit reports and only that they will no longer report medical collections debt under $500. In other words, I am not reading that the new rules for reporting medical collections that are yet to go into effect will be applied retroactively.

How would I get clarification?

Thank you!

Re: Reported Medical Debt

Anovice — Mon, 11 Jul 2022 13:25:35 GMT

An update.

I have decided to take this matter to small claims court. However, due to COVID, there is a long backlog. The case will not be heard until March 2023, possibly longer.

When I checked my credit reports with the big 3 last month, on each, the "Date of First Delinquency" for the $356 was October 11, 2021. The "Date Assigned" to the collection agency was January 25, 2022.

I checked my credit report on Equifax, Experian, and TransUnion this morning and the "Collections" notice has been removed from all 3. I have not paid this $356. The only reason that it could have been was removed, was in accordance with the "new rules" starting July 1, 2022, specifically, the time period before unpaid medical debts in collections will appear on a credit report increased from 6 months to 1 year.

My guess is that it will re-appear on my credit reports on October 11, 2022, if the new rule uses the "Date of First Delinquency". Then, it will come back off in 2023 when the big 3 drop medical collection debt under $500 from credit reports regardless of if it was paid. If they use the "Date Assigned", possibly it will not come back on my credit report, but if does, it will come back off.

Being that the collections notice no longer appears on my credit reports with Equifax, Experian, or TransUntion, is there anything more that I need/can do other than monitor the situation?

Thank you.

Re: Reported Medical Debt

CreditCrusader — Mon, 11 Jul 2022 18:15:48 GMT

@Anovice wrote:

Being that the collections notice no longer appears on my credit reports with Equifax, Experian, or TransUntion, is there anything more that I need/can do other than monitor the situation?

Thank you.

Other than watching the reports like a hawk, there is nothing I can suggest.

That having been said, there is audible disgust across the various medical industries right now relative to this issue. The ability to torpedo the credit of someone who disputed or owed small medical balances was the primary method to force customers to pay up.

It would not shock me to see those balances continue to be credit reported using the "aw shucks...golly gee..." defense that they "didn't know" of the changes. Sure, the bureaus aren't supposed to allow such balances to report, but we all know how painstaking it is to ensure accuracy across three bureaus.

Accordingly, I'd have credit monitoring alerting me about EVERYTHING that happens..at least for the rest of 2022.

Re: Reported Medical Debt

Anovice — Mon, 11 Jul 2022 19:24:55 GMT

Thank you for your post!

I would not think that the cfpb would take it lightly if the big 3 violated the agreement they made with them. If they do, I could file a complaint with them.

So, how do I submit a complaint? | Consumer Financial Protection Bureau (consumerfinance.gov)

I agree with you that I need to monitor my credit reports thoroughly and often. I understand that through the end of 2022, you can get a free weekly Equifax, Experian, and TransUnion credit report through Annual Credit Reports. com.

Equifax, Experian and TransUnion Extend Free Weekly Credit Reports Through End of 2022

Would a paid credit monitoring alert service be better and if so, where can I find one?

Thank you.

Re: Reported Medical Debt

Cowboys4Life — Mon, 11 Jul 2022 21:33:45 GMT

@CreditCrusader wrote:
That having been said, there is audible disgust across the various medical industries right now relative to this issue. The ability to torpedo the credit of someone who disputed or owed small medical balances was the primary method to force customers to pay up.

It would not shock me to see those balances continue to be credit reported using the "aw shucks...golly gee..." defense that they "didn't know" of the changes. Sure, the bureaus aren't supposed to allow such balances to report, but we all know how painstaking it is to ensure accuracy across three bureaus.

The bureas are not going to report it but the unintended consequence you are going to see is one of two things if not both. First: providers may stop filing insurance on a patient's behalf and expect payment up front leaving the patient to file a claim and get reimbursed to avoid the issue of past due balances all together. And before anyone screeches they are requried to take the insurance: they are not required to file the claim they do so as a convenience to THEM not you. The other consequence will be suing within 6 months for balances owed. Lawsuits for medical debt are not as common as credit/loan/other debt collection suits but they will multiply like rabbits once they are left with that as the primary defense against patients who simply don't pay what they owe.

Most patients don't read their insurance policy in full where it openly says when you use the coverage you are legally obligated to pay your out of pocket portion to the provider. That means when you get an EOB that says your out of pocket is $570 that is what you owe and ignoring it for years doesn't make that go away. Now that it can't be on a credit report the providers will simply go straight for the judgment. We have not even begun to see the fall out from this new law.

Re: Reported Medical Debt

Anovice — Tue, 12 Jul 2022 08:37:42 GMT

@Cowboys4Life wrote:
The other consequence will be suing within 6 months for balances owed. Lawsuits for medical debt are not as common as credit/loan/other debt collection suits but they will multiply like rabbits once they are left with that as the primary defense against patients who simply don't pay what they owe.

Sounds apropos to me. My credit score has been over 800 for the past 30 years. If the dentist/credit agency was required to adjudicate the $356 inaccurate and incomplete "balance" before being allowed to slap it on my credit report and trash my credit, this "consequence" would be of no moment. And, there are a whole bunch of me's out there.