What Happens When You Don’t Pay a Hospital Bill?

Receiving a hospital bill can be concerning, especially when costs are unexpected or payment is difficult. The complexities of healthcare billing often leave patients uncertain about the next steps and potential repercussions. Understanding the sequence of events when a hospital bill remains outstanding can help individuals navigate this challenging financial situation.

Initial Hospital Actions

When a hospital bill remains unpaid after its due date, healthcare providers typically begin internal efforts to recover the amount. The billing department usually sends reminder notices within 30 to 60 days, which may outline payment options. If the bill remains unpaid, follow-up phone calls from the hospital’s billing or patient accounting department may begin around 60 to 120 days past due.

Hospitals often prefer to work directly with patients to resolve unpaid balances, preventing more aggressive collection measures. Many facilities offer payment plans, allowing patients to pay their debt in smaller installments. Some hospitals also have financial assistance programs, often called “charity care,” for eligible patients meeting income requirements. Patients can apply for these programs even if their bill is past due.

Debt Collection Process

If a hospital’s internal collection efforts are unsuccessful, the unpaid bill may be transferred to a third-party debt collection agency. This typically occurs after 90 to 180 days of non-payment. Once with an agency, they will begin attempts to recover the money, often including formal letters and phone calls to the debtor. Medical debt constitutes a significant portion of all debt collection cases.

Consumers have specific rights under the Fair Debt Collection Practices Act (FDCPA), a federal law that regulates the conduct of third-party debt collectors. This act prohibits collectors from engaging in abusive, unfair, or deceptive practices, such as harassment or misrepresentation of the debt. Under the FDCPA, a consumer has the right to dispute the debt and request validation, which requires the collection agency to provide proof that the debt is owed and accurate. If the debt cannot be verified, or if it involves surprise medical bills protected by law, collectors may be prohibited from pursuing it.

Credit Reporting Impact

Unpaid medical bills can significantly impact an individual’s credit report and score. Generally, medical debt does not appear on a credit report until it has been sent to a collection agency and remains unpaid for a certain period. Currently, medical collection accounts under $500 typically do not appear on credit reports, and there is a grace period of at least one year before larger unpaid medical debts are reported to credit bureaus. This waiting period allows time for insurance processing or for the patient to resolve billing issues.

While the Consumer Financial Protection Bureau (CFPB) attempted to ban all medical debt from credit reports, a federal judge blocked this rule, meaning medical debt can still be reported. Paid medical collection accounts are removed from credit reports. However, if an unpaid medical debt exceeding $500 remains unresolved after the grace period, it can appear on a credit report and negatively influence creditworthiness for up to seven years from the date of original delinquency.

Legal Consequences

Failing to pay a hospital bill can escalate to legal action, where the hospital or collection agency may file a lawsuit to recover the debt. This is generally considered an extraordinary collection measure and is not always the first step. If a lawsuit is filed, the patient will receive a summons, requiring a response or court appearance. Ignoring legal notices can result in a default judgment against the debtor, giving the creditor more power to collect.

Should the hospital or collection agency win the lawsuit, they may obtain a court judgment that allows them to pursue further collection methods, such as wage garnishment or placing a lien on property. Wage garnishment involves a portion of a debtor’s paycheck being directly withheld by their employer and sent to the creditor, though federal law limits the amount that can be garnished. Property liens are legal claims against a debtor’s assets, which can prevent the sale or refinancing of property until the debt is satisfied. While primary residences often have some protection from liens through homestead exemptions, these protections vary by state.