Can hospitals still send unpaid medical bills to collections?

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Medical emergencies rarely end when you leave the hospital. For many patients, the next challenge arrives weeks later when the associated medical bills begin showing up — sometimes from multiple providers, often with little warning about what insurance covers and what remains outstanding. And, in the current economy, where many households are already balancing high living costs and record debt loads, just one unexpected medical bill can throw an otherwise manageable budget off course.

Dealing with medical debt can be complicated, though, as the rules surrounding this type of debt have evolved over the last few years. Credit reporting policies have changed, lawmakers have debated new consumer protections and certain medical collections debts don't carry the same weight they once did. Those changes have also created plenty of confusion about what hospitals now can — and can't — do when a medical bill goes unpaid.

Given the impact that debt can have on your finances, and the recent changes, it's important to understand how the medical debt collection process works today. So, can hospitals still send your medical debt to collections if it goes unpaid? Below, we'll examine what you need to know now.

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In most cases, yes, hospitals can still send unpaid medical bills to a collection agency if you fail to pay or don't make arrangements to resolve the balance. That said, this process typically doesn't happen immediately.

Before escalating the debt to collections, most hospitals will attempt to work with patients on a solution. They may offer payment plans or other concessions, particularly to those facing financial hurdles, with the goal of making it easier to pay off what's owed. Nonprofit hospitals are also required to follow certain financial assistance and billing rules before taking extraordinary collection actions, including making reasonable efforts to determine whether a patient qualifies for charity care.

If your bill is eventually transferred to collections, however, the debt collection agency generally gains the right to pursue the collection process to secure repayment on the hospital's behalf. That can include contacting you by phone or mail, negotiating payment arrangements and, in some cases, pursuing legal action if the debt remains unpaid and state law allows it.

What has changed recently, though, is how some medical collections are treated by the cre