Medical debts listed on your credit report can and should sometimes be handled a bit differently than normal debt listings. Although you can dispute a medical listing the same way you would any other, you have additional rights that you can leverage when it comes to medical debts.
Chances are, you’ve heard of the HIPAA (Health Insurance Portability and Accountability Act) Privacy Rule. You are probably aware that its purpose is to protect the privacy of your medical information/records. But what you may not know, is that the HIPAA law also applies to the reporting of medical debts on your credit reports.
Per HIPAA, medical providers may only disclose your medical information if they have a permissible purpose for doing so.
Medical providers do not violate HIPAA if they assign a valid, unpaid medical debt to a collection agency and/or report that debt to the credit bureaus. Disclosing your information as needed to obtain payment for services rendered is considered a permissible purpose under HIPAA. But once the debt has been paid, there is no longer permissible purpose to disclose your medical information by reporting the debt on your credit reports, therefore all listings of the debt must be deleted upon payment.
So as you can see, HIPAA can provide you with powerful leverage when it comes to credit repair. But please be aware that HIPAA can’t help with every medical debt! It is only useful in credit repair when it comes to:
-debts that have already been paid -debts that you don’t rightfully owe -unpaid, valid debts that you are able to pay**
**If you haven’t yet paid the medical debt but are able to do so, you should negotiate a pay-for-delete with the medical provider. Be sure the agreement is made in writing and that you have a copy of it before you make payment. Setting up a pay for delete arrangement beforehand is easier than lodging a HIPAA dispute later to get the paid medical debt removed from your credit reports.
The great thing here is that when you attempt to negotiate a pay for delete with a creditor or collector for a non-medical debt, they may or may not be willing to delete the debt from your reports in exchange for payment. But once you pay a delinquent debt to the medical provider, not to the collection agency(!), they have no choice but to delete all listings of that debt from your credit reports, including any listings that have been reported by collection agencies to which the debt was assigned.
PLEASE NOTE: You must NOT make payment for a medical debt to a collection agency! Doing so would waive your HIPAA rights, at least as far as that particular debt is concerned. You must pay the original healthcare provider only in order to preserve your right to have the debt deleted from your credit reports upon payment! However, if you have already paid a collection agency, you’re not out of ammo–you can try sending them a nutcase letter.