Over the course of the past decade, medical bills have become a larger and larger portion of the debt that many Americans are struggling to make payments on. Many times, these medical debts arise from sudden medical issues that the patients were simply not prepared to handle on their own.
Because large medical bills are often the result of unplanned emergency events, they have the potential to alter the plans of debtors who were making regular payments on their previous commitments. Many creditors find this incredibly frustrating, but the best way to handle it is to attempt to understand the situation from the debtor’s perspective and try to work with them on a revised payment plan.
Understanding Debtors with Medical Bills
Sudden medical bills can have a devastating impact on a person’s mindset, which can lead to any previous payment plans being completely abandoned in light of this new debt that they probably did not expect or ask for. When dealing with debtors who have suddenly incurred large medical debts, it is extremely important to understand that they surely did not ask to be put in that situation.
Having a basic working knowledge of medical debt and a willingness to be tolerant of the new situation can allow you to be more of a coach that helps your debtor through a situation, rather than just another intimidating debt collector. As the person who was most willing to work with them, you put yourself in position to be the creditor that the debtor most desires to pay.
In order to help your debtor better understand their new medical debt situation, first you must be willing to listen to them. This is where many debt collectors fall short, which is an opportunity for you! Take a few extra minutes and really listen to the details of the debtors situation, then use your expertise to help the debtor put together a clear plan of attack. If you are a debt collector in California, you should have a working knowledge of the regulations specific to medical debt in this state.
Collecting Medical Debt
If you are a professional charged with collecting medical debts, you are tasked with one of the most difficult types of debt collection. One positive that you do have in your corner is that because of the Affordable Care Act, many more patients are coming in to be treated with insurance. That means that they generally owe just deductibles instead of huge bills. These deductible debts are usually smaller, which makes them more likely to be collected.
When attempting to collect medical debt, all of the debt collection policies that work for other types of debt still apply. The big difference with medical debt is that the debtor usually did not ask for the situation that caused the debt. That means that you should take the time to work with them on how they might be able to manage this unexpected debt. Extra attention to communication and debtor education are key components of successful medical debt collection.
Focusing on improving your communication with debtors can help you better assess their ability to make payments. Using this information, it is a good idea to rate each debtor based on your perceived odds that they will be able to make full or partial payments. Using these ratings, you can avoid wasting your time on the most unlikely situations. These might be good options to send to a commercial debt collection agency.
If you do elect to send a medical debt to a commercial collection agency, you will want that agency to have a good understanding of the regulations specific to the state where your debtor lives. For example, if your debtor is from California, you will want to look for a collection agency in California that understands exactly what is required to collect medical debt in that state.
Whether you are dealing with a debtor who has suddenly been burdened with additional debt from a medical situation or you are attempting to collect a medical related debt, you should take an honest assessment of your ability to collect compared to the time that collection will require. In many cases, you might find that medical debts are best handled by experienced collectors from collection agencies.