Helping a Friend Negotiate Medical Debt with Collection Agency-Advice Needed

[Lisa R.]

A dear friend has medical insurance but chronic health issues and has accumulated medical debt in the last 2-3 years. They've asked me for help in organizing these bills and negotiating payments. 

 

--There is about $6,000 in medical debt and about $4,000 in available funds.

--Friend says bills are legitimate. In other words, he cannot dispute them as not being his bills.

--Most of those have gone to collection agencies.

--Friend does not want credit score adversely affected any more than necessary. So, he would rather pay the full amount if that helped the credit score rather than pay a lesser negotiated amount that negatively affected the score. I'm not sure I agree with that, but I want to respect this decision.

--He mentioned there is a "pay to delete" option that will make the bill disappear from the credit report if bill is paid in full. 

 

I also read an article where it suggested calling the original medical provider even if bill had gone to collections as they may be more willing to negotiate. Any thoughts on this?

 

I've done some research on the "pay to delete" and it looks like some articles say that it's not allowed and some say that it is. He insists this is really important to do.

 

Also, should I try and talk him into stretching his money by negotiating some of these bills down but taking the credit score hit? This makes sense to me but he was very opposed to this suggestion in our first conversation.

 

Also, I am helping with this task as I am fairly good at negotiating. Friend says collection agencies do not respond well to firm approach but rather a pitiful story. I typically have a strong approach and am polite until I'm met with someone unreasonable or unmoving. When this happens, I ask to speak to the manager and usually get what I'm asking for. (I always try and be reasonable and respectful but am definitely  not contrite.) Friend says this approach will likely not work with collections people.

 

Any tips? I've not talked to a collection agency before and am not sure what to expect.  Feel free to PM me, if you're more comfortable.

 

 

Edited January 2, 2018 by Lisa R.

[mom2hunangirls]

I haven’t tried this, though I will need to soon...they want their money. They want any money. Often if they think you will not pay they will negotiate. If the bill is $6k, ask them what they will take for cash right now.

One friend paid 50% of the amount if she paid within the week. That’s what I’m hoping for.

 

It’s supposed to be illegal to have an insurance rate and a cash rate. Back in the day it was because the insurance companies balked at having to pay more. Now, it seems to be the opposite. I know for a fact that the place I’m dealing with charges $150/hr to Insurance. But $65 for non-insured. As someone with a $5k deductible you better believe I’m ticked off about it.

Also, I know we’ve paid $500. But the bill I got was well past the month I made payments but the payments were no where on it. So it said I owed $700 when really I only owed $200. Ticked again. I called the billing company and they said “yes, I see your payments, but they haven’t been applied yet. I can do that for you.†Oh my word! So deceptive. Of course, I want the payments applied to my balance first.

All this to say, watch your bills closely.

 

I’ll be watching to hear what others say because I’m no expert.

[Laurie4b]

Call the original provider and negotiate with them,

[Lisa R.]

Call the original provider and negotiate with them,

 

This seems like a good idea.

 

However, doesn't the hospital or doctor's office sell the debt to the agency at a reduced price? I'm not entirely sure how this works.

 

Also, if a lesser amount was negotiated, would it still affect the credit report? This seems to be his main concern--almost more than the debt itself.

[Bootsie]

How many different providers are owed?  I might approach this differently if it were one provider who is owed $6000 or six providers who are owed $1000 each.

[Lisa R.]

How many different providers are owed? I might approach this differently if it were one provider who is owed $6000 or six providers who are owed $1000 each.

Six or seven providers. Amounts vary from $50-$1800.

[Alessandra]

It's wonderful what you are doing. I haven't had experience in this exact area, but when I have had mix ups with medical bills, unless it's very routine, I have found it far preferable to go the the office or hospital and speak with someone directly. A face to face meeting and a smile can often get a billing person on your side in a way that an impersonal telephone call cannot. just my experience, ymmv.

 

The other thing I do is keep a dated, written record in a bound book, as opposed to anything typed or looseleaf.

[SeaConquest]

I would try to research each collection agency on MyFico to see what other people have done. Different agencies approach things differently. Some will pay for delete, some won't. The older the debt, the more likely you are to get a better deal. Make sure the statute of limitations hasn't run on any of the debt.

[JumpyTheFrog]

https://radicalpersonalfinance.com/tools-and-principles-to-help-you-fight-nasty-with-your-creditors-and-win/

 

Here is a podcast episode about dealing with creditors.

[Laurie4b]

Call the original provider and negotiate with them,

 

BTDT. Sorry. I was not able to type more at the time.

 

When we had huge medical bills, someone we knew who had been in charge of patient billing at a large university medical center told us not to pay anything until they were threatening or had started using a debt collecting agency. He said that there were always mistakes on the bills. Always. And that until we let it get to that point, we wouldn't be able to speak to someone with enough authority to actually do something to reduce the bill. Once you hit that level, however, they routinely write chunks of it off and will set up a doable payment plan for what you then actually owe.When the hospital writes it off, they are altering your bill, not collecting debt, so it shouldn't go on your credit record. 

[Bootsie]

Do you know if before this situation his credit score was high or low?  Also, do you have an idea of whether he is in a situation where his credit score will be a major issue for him in the next few years?  To me, these factors would be important in determining how important it is to avoid a hit to his credit score.

 

I would begin by checking each bill to see which ones have gone to collection agencies.  If a smaller bill hasn't gone to a collection agency yet, I would start there just to make it fewer people to be dealing with.  

[Jaz]

When you negotiate with collection's agencies, don't tell them the amount of money you have available. Get everything in writing before you pay!