Aggressive debt collectors usually exploit people's ignorance of the law and prey on debtors' fears and anxieties. For this reason Congress enacted the federal Fair Debt Collection Practices Act. California expanded such protections by enacting the Rosenthal Act "...to ensure that debt collectors and debtors exercise their responsibilities to one another with fairness, honesty and due regard for the rights of the other."

Evaluating the debt

If you have a health care plan, it is important to determine whether the Explanation of Benefits (EOB) is consistent with billing/payment statements from the provider.

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You should also review your plan to determine your share of co-payments and deductible. If the plan rejects part of the bill or refuses to pay altogether, the EOB should state the reason. If you cannot understand the EOB's explantion of why services are not covered, you should contact the customers services department listed on the EOB.

If the "allowed" amount has already been paid and you have already met the deductible( and co-payments) your balance should be zero. “Balance billing” for the total amount of submitted charges is illegal in California. You should dispute such bills in writing.

If you received out-of-network services, or non-covered services, or have no plan at all, then you are obligated to pay reasonable fees for all goods and services you accepted from the provider. Usually your financial obligation is determined by implied contract terms. Express contracts for medical care are rare but such agreements do exist. Elective procedures such as cosmetic surgery, dental implants, infertility services, are often negotiated directly with the patient without any expectation of coverage from outside sources.

Reasons to avoid procrastination

Procrastination almost always hampers your ability to negotiate. If you simply ignore the bills, your silence could be interpreted as an agreement to pay the full amount listed on each bill.

Law suits to collect medical debts are usually prosecuted by professional debt collection agencies after the provider has abandoned their efforts to collect.The provider-creditor bundles your debt with other delinquent accounts and these are sold to a debt-purchaser for pennies on the dollar. This "assignment" of debt is perfectly legal. The debt collection agency steps into the shoes of the original creditor.

You can probably save more if you negotiate directly with the health care provider who already knows you. Protecting the doctor-patient relationship is especially important for a patient who needs future care from the same provider. Making regular payments, no matter how small, is wiser than ignoring the debt.

The vast majority of judgments against consumers are by default because unsophisticated debtors often miss the filing deadline. A defendant who has had a default judgment entered against him may move for an order vacating the judgment. But this is an uphill climb. The sooner the debtor seeks legal representation the better.

Challenge denials of coverage

If coverage for a particular procedure is denied, you should follow health plan appeal/grievance procedures to try to resolve the issue. If this fails, you may seek an Independent Medical Review from California's Department of Insurance. The question whether you can sue in state court or federal court depends on the type of insurance policy you have.