Monday, May 12, 2014

Q&A: Healthcare Recovery Solutions, HIPAA Violations and Medical Info on a Credit Report

Hello Lee,

I am writing in regards to a collection agency - Healthcare Recovery Solutions - I had sent them a letter asking them to validate several collections on my credit report.

I have several issues here

First - they did validate but here is where I have the problem -  The collection agency sent me bills from the hospital - they sent me everything that my husband had done
meaning they sent me an itemized list of all my husbands procedures - from the drugs they gave him, to the surgery he had - everything.  Is this not a violation of the HIPAA laws?  There is six accounts and six different itemized pages of what my husband had done.

Second - not only has the collection agency sent all this information - but they are reporting this on my credit report - and clearly I was not in the hospital my husband was.  I have the signed paperwork from the hospital that is my husbands not mine.  I have disputed this information but have not gotten it removed.  Can they report to my credit bureau report when it is clearly not my bill?

I am in the process of cleaning up our credit - I have followed all the necessary steps - I sent out certified letters and confirmation - here is my next question - I sent out DV letters and most of the companies have not responded big surprise.  But here is my question - are they required by law to notify the CRA that I am in dispute and requesting DV?  I have all the proof - what would be my next step since for one they have not validated and two they have not reported that I am in dispute to the CRA?

Thanks for all your information on your website - it has been such a great help.  I was one of those people who hired a company to help fix my credit and after spending a 1000.00 with really no success - I took over and have had great success.

If you need further information please let me know - If you need copies of what Healthcare Recovery Solutions sent as far as my husbands detailed hospital bills I will send them to show you what they sent.
Thanks again



Wow...where to begin. 

First of all, I'm no HIPAA expert, but I do know that the law allows medical information to be disclosed to third parties for payment purposes. Now, that law is aimed at giving insurance companies as much information as possible in order to ensure proper payment for services--not providing collectors with potentially embarrassing information with which they can bully or humiliate debtors. 

HIPAA laws have changed recently making it easier for third parties to gain access to your medical information. Although I agree with you 100% that this reeks of illegality, HIPPA is complex and I can't say for certain that the hospital doesn't have the right to forward the medical information as it did to Healthcare Recovery Solutions. What I can tell you is that NO sensitive medical information, such as tests your husband had performed or his diagnosis should ever show up on either of your credit reports. I'm not even sure how this information ended up there since the credit bureaus have no format for information other than the basic tradeline (debt, account number, date owed, etc.). 

You don't mention your state of residence and that's crucial to this situation. If you live in a community property state, you are legally liable for any debts your husband incurs during the marriage and he is liable for debs you incur. Because you are just as liable for these debts as your husband, the collection agency has the right to report them on your credit report. If you do not live in a community property state, however, then reporting the debt to the credit bureaus in your name is a violation of the Fair Credit Reporting Act 

Disputing this with the credit bureaus is likely going to get you nowhere since the credit bureaus and collection agencies like to parrot back and forth ("Is this correct?" "Why yes, it is" "Oh, okay then") and call it an "investigation."

As far as the disputes go, the collection agency doesn't have to report the dispute to the credit bureau. They can, but they don't have to. The Fair Debt Collection Practices Act requires, however, that once a debt collector receives a request for validation the company must cease all collection efforts save credit reporting (grumble) until they can provide you with validation. Unfortunately, neither the FDCPA nor the Fair Credit Reporting Act stipulate precisely what constitutes validation. Collection agencies get around the validation requirement by sending out little printouts on their company letterhead that contain your name, an account number and the amount they claim you owe. This only verifies that they claim you owe a debt, not that you actually incurred the debt. But, should they find themselves in court, they can wave this paperwork around and call it validation because the law simply doesn't specify one way or another. 

The collection agencies that did not respond to you are probably ignoring you because you waited more than 30 days to request validation. Section 809 of the FDCPA states

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
This 30-day validation period begins when the debt collector first contacts you about the debt. Because first contact usually occurs via uncertified mail, collection agencies often cannot prove that a debtor who requests validation late actually received the original dunning letter and isn't still within his or her 30-day time frame. If you communicated with a debt collector from the company more than 30 days before sending your validation request, the collector knows for a fact that you were aware of the debt and can simply ignore your validation requests because they did not take place within those first 30 days.

Keep in mind that, even with validation requests that take place within the allotted time frame, the collection agency is under no obligation to respond. They can ignore your validation letters for as long as they like provided they do not engage in any collection activity without validating

Once upon a time people used this loophole to clean up their credit reports. They would send a validation request to a collection agency and simultaneously send in a dispute to the credit bureaus. The collection agencies couldn't conduct any collection activity before validating which prevented them from verifying the debt's accuracy to the credit bureaus when the credit bureaus began their "investigation." When the collection agency didn't respond, the FCRA required the credit bureaus to delete the entry. It doesn't work quite like that anymore, but Kristy Welch has a brilliant guide to forcing the credit bureaus to actually investigate your debt here: Method of Verification

I wish I could help more with the HIPAA issues, but I don't want to accidentally steer you down the wrong path. I do, however, believe that medical disclosure as extensive as what you've described to me here is probably on he wrong side of HIPAA. My recommendation to you is to hire an attorney. Now. Today. Many have free consultations and, if you don't think you can afford one, contact your state's legal aid department to see if an attorney will take your case at a reduced rate. Once an attorney reviews your situation I'm willing to bet that he/she will have more than enough information to help you clean up this mess and get you and your husband some well-deserved restitution. You may even be able to find a lawyer willing to work on a contingency, and that won't cost you a dime. 

I am interested in how this situation plays out. If you get a chance to update me on your situation you can do so in the comments. You never know, another reader may benefit greatly from your experience. 

Best of luck,

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