Best way to handle a collection notice from a medical bill on my credit report?

[Ralph]

I don't know how this slipped past me, but a (*&%$# dermatologist gave us lots of trouble billing my HMO and as a result I wound up with a collection notice for $300 on my Experian report. Obviously it got past me because paying $300 BEFORE my credit got ruined would be much cheaper than $300 AFTER. Should I:
1. Pay the sleazy (*&^$ collection agency?
2. Submit a detailed report on how we tried to work with the doctor's office to bill the insurance company (100 words, right?) But they will only remove factual errors, and I'm sure the facts according to the doctor's office is that the insurance company refused to pay.
3. Can you do BOTH 1 and 2?
4. Report the dermatologist to the state insurance agency? Yes, I know, that is worthless except for the satisfaction it might give me.

Needless to say I am furious right now and can't think straight. Furious equally at myself for missing this until it was too late and at the sleazebags involved in this all too common doctor/insurance company BS, and at the CC companies that slavishly place so much weight on an obvious tactic by insurance companies to avoid their responsibilities.

[maat55]

If you owe it, just pay it. Your only other recourse is to dispute the debt. The collector has to prove it is viable or the reporting agency will remove it.

[Seeker]

From the words above, it's not clear what happened...

Did the insurance company have a "valid" reason for refusing to pay?

Did you know about this billing not being paid, dispute or correct it with anyone prior to collection agency time?

Do you have any documentation?

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My one arguement was with an insurance company; my agent with this company "retired" and his accounts were distributed among other agents in the locale.

I never met my "new" agent, but he kept moving, and not into a nice part of town... so I went to another agent within the same company and updated the policy. Unfortunately, the old agent kept "updating" it back; I could never reach him by phone (operator recording indicated a wrong number). And the address was only to the corporate office billing dept.

I called corporate and they said they cannot do anything; that I have to deal with the agent. How? They had no reponse to that. Don't you just love "independent agents?" The only place to write to was a billing place and it was clearly stated that any other mail (other than payments) would be discarded.

So each and every time a billing came, I went back to my new agent to "correct it" subtracting the additional amounts due... but at some point he could not cross the accounting boundary and so I just quit bugging him.

Finally, I get some threat from the company that we will cancel your policy "now" if you do not pay. My "policy" was soon to expire and I went on to another insurance company at that point.

Sure enough six months later (or so), I get a notice in the mail from some collection agency. By this time, the amount had grown to some $50... which is not a whole lot to complain about, but I called the collection agency company and explained that I have a copy of every single billing and change and had documented the whole thing. That it all was a mistake and no monies are due by me to this company.

They paused and said that most people do not document everything, but to send them copies and they will take care of it. I do so, highlighting the "old agent" and "new agent" and the dates of the billing from each agent countering each other, and sent it all to the collection agency.

I never heard from them, nor the original company again, nor has it ever needed to be corrected on my credit history.... because it never appeared there. I still have this documentation if needed.

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If you have documentation of the problem, and you do not owe the money, then dispute it.

If you do owe the money, then pay it.

Nobody can counter was is written. Words spoken prove nothing on either side.

Errors and/or agreements must be documented.

[boosami]

If you do not believe it is a valid debt, or do not know, do not talk to the collection agency, offer to settle, or pay it. First, attempt to dispute it with the Credit Bureaus. They will contact the collection agency and confirm validity of the debt. If they find it is invalid, it will be removed from your credit report. The collection agency may still bug you about it, though, so you also have to write them a letter explaining that the debt is invalid and all further contact with you should be only in writing. Eventually, they will give up and leave you alone.

If your disputes fail, you will have to settle the debt and it will show up as a paid collection and will be a bad mark on your credit for 7 years. You might as well try to settle for a lower amount. Make an offer to the collection agency of ~30% of the total, and hope to settle around 50%. Get everything final in writing, especially any promises to minimize the damage to your credit. Do not give them your bank account details, instead send a money order or something not traceable to an account. You don't want a collection agency having access to any depository account of yours.

Finally, be more careful in the future so this doesn't happen again!