Medical collection agencies are employees who make claims for damages
More than two years after he was injured on duty, Hans Maestre, an Aventura Police detective, spent the day after Christmas 2018 reviewing his financial records when he noticed a bug in his creditworthiness.
Maestre, who described himself as meticulous about his finances, quickly called the credit bureau. He found that the hit on his score came from an unpaid bill related to medical treatment he received for a leg injury sustained when he was arrested in July 2016. but Since Maestre had filed a lawsuit for workers compensation over the incident, he should never have received an invoice.
What came next was a month-long campaign by Maestre to correct the mistake. While battling the bill, Maestre, who also runs a real estate business, said he needed to borrow $ 8,000 for the business and in the end, 8% interest was billed instead of the usual 6% he had paid. He blamed his lower credit rating for the higher interest rate.
Maestre decided to hire a lawyer and the dispute over his medical bill ended in a confidential settlement.
According to South Florida consumer advocates, there are hundreds more like Maestre who are often suing the debt collection agencies. But legal challenges haven’t slowed medical debt companies back, the lawyers said, because the penalties they face under federal law aren’t severe enough to meddle your business strategy.
In recent years, medical collection agencies have become more aggressive, experts say. Jenifer Bosco, a national consumer law attorney, said the field is teeming with bad actors who ignore or defy the law in order to chase the sick and injured for money they don’t even owe.
The skirmishes often take place in the federal courts of South Florida. Paul Herman, a Delray Beach-based consumer protection attorney who represented Maestre, said medical collection agencies in the area are billing workers’ compensation claims so often that this has become the “bread and butter” of his law firm.
“We billed over 100 in the last year alone,” said Herman. “And we have 25 to 30 in litigation.”
Herman and his co-attorney Joel Brown said they sued more than a dozen outside debt collection agencies in South Florida about medical bills in the past year and a half. About 137 million Americans are grappling with medical debt, according to a report published in the Journal of General Internal Medicine last year.
In 2014, the Consumer Finance Protection Bureau published a large-scale study of medical debt that found that half of all past due debts on credit reports were due to medical bills, and that one in five credit reports contained past due medical debts.
Federal law limits the amount of damages that plaintiffs can reclaim from medical collection agencies to $ 1,000. And companies have decided it’s worth sending bulk collection letters – and collecting a large percentage of them – rather than examining each invoice to make sure it’s owed, Herman said.
He explained the tactics of the debt collectors.
“If I do it 100 times – 90 times, nobody will bother me,” said Herman. “They get a lawyer ten times, maybe I’ll get a couple of them off and I’ll get sued by one. I’m paying out tens of thousands of dollars [for the litigation] But now I’m collecting millions There is no incentive to change their tactics. ”
But Herman and Brown said a ruling last October in the southern Florida borough could soon change that dynamic.
The order was waived in the case of a client, Archie Malone, who sued a debt collection company over a debt collection letter demanding nearly $ 1,000 after being treated at JFK Medical Center in Palm Beach County.
U.S. District Judge Rodolfo Ruiz’s ruling, appointed by President Donald Trump in May 2018, could weaken one of the most common defenses used by debt collection agencies in federal courts: that they simply rely on the information given to them by a medical provider, and therefore are not responsible for sending an incorrect collection notice.
In his ruling, Judge Ruiz said the debt collector was “not entitled to simply rely on the presumption that all debts transferred by the medical center are legally due and owed”. The decision is currently being appealed to the 11th US Court of Appeals in Atlanta.
Bosco, a staff attorney at the National Consumer Law Center who investigates medical debt claims, said the center hears too often that collection agencies “sue patients for debts already paid, for debts the patient does not owe.” , Lawsuits for statute-barred debt, lawsuits for claims already paid by charities, attempting to collect from debtors who have filed for bankruptcy protection, repayment of illegal or excessive collection fees, and more.
She said the Malone case “could open the door to other courts in the eleventh district to apply the law to help consumers struggling with medical debt.”
Following the court ruling, she said, the judge blamed the debt collector “for his sloppy practices” and would not allow the company to “blame the health care provider for their own lack of adequate process to confirm the validity of the guilt”.
In the case of Maestre, the Aventura detective, the debt the company was trying to collect came from a CT scan he said he never had.
Had he not known that all bills from the incident should have been covered by workers’ compensation insurance, Maestre said, he would likely have assumed the bill was valid and paid it.
Maestre compared medical debt collection companies to towing companies.
“They operate in the gray areas,” he said. “You can tow people and even if they’re wrong, that person will pay.”
This story was originally published January 10, 2020 7:00 a.m.