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Can anyone refer me to law/rule/legal statute RE: OC ability to recall debt?


Wallacs
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Hello! Thanks in advance for help/advice. Here's the situation.

1. Husband was laid off. Several medical bills went into collections.

2. What I *want* to see happen is that the OC will recall the debt and allow us to make payments, thus removing it from our credit report.

3. OC office is saying they "can't" recall the debts, but of course, they can.

4. What law or legal precedence proves that they CAN? I'd like to be able to cite it to office and/or doctor, if I need to appeal directly to him.

Again, thanks!

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Maybe they can and maybe they can't. There are some considerations here.

1) Did they contract out to the debt collector or did they sell the debt to the debt collector.
If the hospital sold the rights to the debt to the debt collector, then they cannot recall the debt because they no longer own it. The debt collector now owns it. IF they simply contracted out to the debt collector, then they can recall the debt if they wish

 

2) Hospital policy may not allow them to recall the debt.

Hospitals are not in the debt collection business. They are in the medical care business. Many businesses and government organizations contract out parts that are not within their core business. The hospital may not want to bother collecting payments and so contracts that out and does not recall the debts as a matter of policy. One cannot force someone to do something unless the law compels them and in this case, the law does not compel the hospital to recall the debt.

You really cannot do anything with the hospital if they refuse to recall the debt.

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3. OC office is saying they "can't" recall the debts, but of course, they can.

4. What law or legal precedence proves that they CAN? I'd like to be able to cite it to office and/or doctor, if I need to appeal directly to him.

Again, thanks!

 

3.  Figuratively they CAN recall the debt because no law says they cannot or must do so.  Literally they may not be able to due to how they handled the debt when you defaulted.

 

4.  The law controlling this is contract law.  If they contracted with a collection agency to collect the debt and signed a contract stating that they would not recall the debt once placed with the CA then they can't recall it.  There is no law or precedent that requires them to back out of their contract with the CA.  If they sold the debt (which is rare) then they can't recall it because they no longer own it.

 

Despite what you read about some supposed "methods" that will remove medical trade lines from a credit report as a HIPAA violation there is absolutely NO truth to that what so ever.  If the CA has validated the debt with you or the CRA then they have a continued business relationship with the provider and can report.  It is not a HIPAA violation.  You can write all the fancy statements in the letter you send with the payment or on the actual check stating for "Dr. Smith only" and it won't stop them from handing the payment over to the CA and marking the TL as paid/closed.  

 

If the goal is to get the TL off your CR you can try a PFD and see if they will agree.  While it is desirable to avoid paying a CA when at all possible there is no law that allows you to force the original provider of any service to recall a debt from a CA so that you can pay it.  They can require you to deal with their CA.

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There is a lot of misinformation about CA's and HIPAA violations that are for the most part untrue. You need to save for a PIF and then negotiate a PFD from the CA if you owe the debt. That would probably be the easiest way to kill this unless they have been kind enough to commit a violation.

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Thanks all!  I appreciate the insights.  FTR, I wasn't referencing anything to do with HIPAA. I guess i don't understand why they wouldn't want the balance paid to them rather than the fraction they get from the CA. They told me they CAN recall it if it was a mistake on their part, or if the insurance wasn't billed correctly.

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They told me they CAN recall it if it was a mistake on their part, or if the insurance wasn't billed correctly.

 

That tells me that their contract with the CA states that there are terms under which they can recall the debt but absent those they are contractually obligated to let the CA handle it once the account is placed with them because they are getting paid on commission for what they actually collect not flat fee.

 

The reason for this is the collection agency gets the account and puts in the time and energy to collect only to have the provider paid directly and not get paid for their work.  It also benefits the provider in only having to pay when the money is actually received.  

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