California Medical Debt Collection Laws

As the cost of medical treatment and medications have skyrocketed, Americans have increasingly had trouble dealing with medical bills. Even with things like the Affordable Care Act and the No Surprises Act helping consumers limit their out-of-pocket costs, healthcare remains prohibitively expensive for many people. Medical debt is slightly different from regular debt in that you didn’t necessarily wake up that morning intending to visit the emergency room for a $30,000 treatment. Despite it being a different kind of debt, once medical debt reaches a debt collector, the laws regarding the collection of that debt are mostly the same.

Below, we’ll discuss these laws and some provisions of a new law passed in 2022 designed to help protect people from unfair medical debt collection practices. We’ll also explain how top credit repair companies like The Phenix Group can help repair your credit by removing inaccuracies.

The Fair Debt Collection Practices Act

Also known as the ‘FDCPA,’ this federal law governs debt collection agencies and how they operate; it is also the basis for more strict California debt collection laws. In short, the FDCPA contains several laws regarding debt collection harassment and how debt is collected. Once a medical debt has gone to a collections agency, FDCPA laws apply. Here are a few important points within the FDCPA:

  • Debt collectors may only call you between 8:00 AM and 9:00 PM
  • Debt collectors may not harass you by calling repeatedly
  • They may not threaten you with physical harm
  • They may not threaten to arrest you
  • Collectors cannot threaten to sue you unless they intend to actually file a suit against you
  • Collectors cannot attempt to defame you by sending letters that indicate on the envelope you owe them money
  • Collection agencies also cannot defame you by informing other people who answer the phone that you owe a debt—they may only ask to speak with you

The New California Medical Debt Collection Law

This law is known as ‘Assembly Bill 1020,’ which took effect on January 1st, 2022. It contains several provisions attempting to disincentivize hospitals and medical care providers from sending debt to bill collectors. 

Previously, medical care providers sent unpaid bills to debt collectors almost immediately, as the hospitals and their billing departments simply didn’t have time to collect unpaid debts. 

The new law prevents medical care providers from sending your debt to collections unless the following steps have been taken:

  • The hospital must wait 180 days before sending your bill to collections
  • The hospital must offer you alternative payment options such as use of medical charities or state financial assistance
  • The hospital must make it as easy as possible for you to understand the bills and the coverage provided or not provided by your insurance 

Credit Repair

All it takes is one wrong keystroke on a name or a social security number to incorrectly assign a debt to someone else’s credit report. In a world of aging IT infrastructure that remains critically short-staffed, these mistakes have become more common. 

If you have received a call from a bill collector for a debt you believe is not yours, or you have recently been denied a loan or credit application due to incorrect information stated on your credit report, a credit repair company such as The Phenix Group can help.

The job of legitimate credit repair agencies is to assist in removing inaccuracies from credit reports and working with the client to educate them about the overall credit reporting process so that they can make informed decisions regarding their personal credit. 

Medical debt can be a massive burden, but it’s important to remember that even when you’re dealing with that burden, you still have rights.