Cracking down on abusive medical debt collection practices

Thank goodness for the Boston Globe. The four-part series on Debtors’ Hell that ran over the summer highlighted the abusive nature of the debt collection business. Now, at least some Massachusetts counties are responding.

The headlines from the summer series more or less tell you what you need to know:

  • Part 1: Preying on Red-Ink America. No mercy for consumers
  • Part 2: A Court System Compromised. Dignity faces a steamroller
  • Part 3: Enforcers’ might goes unchecked
  • Part 4: National Crisis, Official Silence. Regulators, policy makers seldom intervene

One of the articles in part four, For some, a bitter remedy for overdue medical dental bills, described the following, all-too-common situation:

When Marcy Armington objected to her obstetrician’s bill, believing her health insurance should cover the $300 balance due for the birth of her daughter, she had no idea that such a common dispute would leave her vulnerable to the ”The Hubbard Law Office Experience.”

That would be attorney Richard R. Hubbard of Uxbridge. Hubbard sued Armington on behalf of Dr. Thomas A. Spina of Hopedale – though the suit listed the wrong address, so she knew nothing about it. Last March, two Worcester County sheriff’s deputies came to her Milford home to take her car. To keep it, Armington had to pay $983, to cover the $383 court judgment and the $600 sheriff’s fee.

Debt collection is a very sleazy business to begin with as the series describes—

Constables…carry badges and have arrest powers — yet are untrained and unmonitored. [M]any do the dirty work of property seizure for some of the most aggressive debt collectors in the state… In Boston, 88 of the 186 constables have criminal arrest records of one kind or another…

–so I’m not surprised that debt collectors would try these tactics. But what’s appalling to me is that unpaid, contested medical bills are considered legitimate debt and that sheriffs so willingly participate. Anyone in the medical field knows bills are often just plain wrong and almost always hard to understand.

There’s still nothing like front-page exposure in a big city newspaper to effect change. The Globe reported today that sheriffs in three large counties are no longer seizing cars to repay medical and dental expenses, nor when the amounts owed are less than $1500. Those changes have been enough to drop seizures by half, which tells you something about how common these cases are.

As previously reported, medical bills are a major contributor to bankruptcy filings. Even people with health insurance can end up in BK if they encounter a serious, prolonged illness. One reason is that medical care is expensive. Another is that administrative errors, bureaucratic indifference, and aggressive “debt” collection are enough to drive people over the edge.

December 18, 2006

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