Medical Debt
Medical DebtThe COVID-19 pandemic has brought most things to a temporary halt, but efforts to collect a medical debt is not one of those things.
Anyone with an unpaid medical bill – regardless of whether they’ve been personally affected by COVID-19 via layoff, termination, or actually contracting the virus – might still face aggressive collection efforts. This includes the collection departments of hospitals otherwise focused on treating patients for COVID-19. Some hospitals have even filed new claims within the last few months.
Medical debt collection, of course, isn’t the only type of collection activity that continues. Some lenders have been more willing to work with debtors, but this isn’t always the case. And in a time when people face not being able to afford rent or groceries due to a sudden layoff or job loss, the situation is especially devastating. People are forced to choose between paying a medical bill and affording food or a place to live.
COVID-19 Has Resulted in More Aggressive Collection Efforts
There is also concern that the pandemic has led to even greater efforts in the aggressive collection of medical debts because hospitals claim to be hurting financially.
Many hospitals are looking to make up their losses by pursuing former patients for unpaid bills. Froedtert Hospital in Milwaukee, WI, filed nearly 50 small claims lawsuits after the declaration of the state of emergency in the state. All legal action ceased within a few days. But not before many people found themselves receiving notifications from the court about their unpaid debts. Hospital representatives called the most recent lawsuits a “miscommunication” and many were ultimately dismissed.
Adding insult to injury, the National Consumer Law Center reports that US hospitals have received at least $100 billion in federal funding from the COVID-19 relief packages intended to help cover some of the damage of the crisis. Unpaid medical bills account for just a small portion of hospital revenue in most cases. Many argue the medical bill of a few hundred or thousand dollars of one patient is a drop in the bucket when it comes to the amount of money exchanging hands when it comes to hospital funding. Yet the hospitals are still doing all they can to collect these bills.
Hospitals Have the Power to Take Aggressive Action against Consumers
As people with unpaid medical debt quickly learn, there’s little hope for them. This is especially true once legal action begins.
Every year hospitals win hundreds of millions of dollars in judgments, allowing them to move forward with even more aggressive collection actions, such as wage garnishment or worse. Medical debt, more so than any other type of debt, has forced people to turn to bankruptcy. That trend won’t end any time soon.
The temporary relief – the financial relief measures, temporary orders banning bank and wage garnishments – are just that: temporary. Many have already begun to expire as things re-open at varying rates from state to state. Many people can return to work, but the damage is already done. The two months or more they’ve been out of work put them so far behind on bills they’ll never catch up. And that’s not even taking into account the difficulty many have had to try to collect unemployment benefits.
The good news is the situation isn’t completely hopeless. It might be some time before we understand the complete fallout from COVID-19. But in the meantime, people continue to struggle. For many, the pandemic has made their usual financial challenges much worse. If you need guidance or have questions about handling medical debt collection efforts, contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA) to schedule a consultation.
