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January 23, 2020

The most aggressive debt collector in America?

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    In 2012, Ricardo Gonzalez Jurado fell 25 feet and fractured his heel bone. After surgery and a three-day stay at Brooke Army Medical Center (BAMC), a military hospital, Gonzalez Jurado recovered—but that was the start of a more than seven-year-long battle with the U.S. government to pay his medical bills, Jared Bennett and Olga Khazan report for The Atlantic.

    Infographic: What patients want in billing and collections

    Gonzalez Jurado's story

    After the fall, Gonzalez Jurado, who didn't have health insurance, called an ambulance and requested that it go to a nearby hospital in San Marcos, Texas. However, given the nature of his injuries, Gonzalez Jurado said the paramedics instead took him to BAMC, a military hospital about 50 miles away. The hospital, Bennett and Khazan report, is a trauma center that was considered better equipped to treat Gonzalez Jurado's injuries.

    Gonzalez Jurado spent three days in the hospital and eventually made a full recovery, but after about a month, he received a bill from BAMC for over $28,000. Gonzalez Jurado made a plan with BAMC to pay them back $100 a month until his debt was paid.

    In 2014, BAMC increased the monthly payments to $300. Gonzalez Jurado continued to make those payments, and a few years later, BAMC sent him a letter informing him his debt was paid off. But Gonzalez Jurado believed they were mistaken. By his own calculations, Gonzalez Jurado had only paid $8,000 of his $28,000 bill. He reached out to BAMC's billing department, but was unable to contact them, and the hospital started sending back his checks, Bennett and Khazan report. The turn of events led Gonzalez Jurado to think the hospital might've decided to wipe out the debt, given his financial circumstances, Bennett and Khazan report.

    Then, in April 2018, Gonzalez Jurado received a letter from the U.S. Department of the Treasury, which handles debt collection for government agencies. The letter said he had $35,016 in unpaid debts to BAMC, roughly $15,000 more than what he owed when the hospital told him his debt was paid, Bennett and Khazan report. Gonzalez Jurado sent two certified letters to the Treasury Department and called, but received no response, he said.

    At the end of 2019, Gonzalez Jurado was still trying to resolve his situation with BAMC and learned his debt had been transferred to Coast Professional, a collections agency. According to a letter he received from Coast, he owed $36,661, but Coast also reported $73,218 in owed debt to two different credit bureaus. Gonzalez Jurado sent Coast a letter disputing the charge.

    Then, days before The Atlantic published its article, and a few weeks after The Atlantic had spoken of Gonzalez Jurado's case with the Treasury Department, Gonzalez Jurado received a letter from the agency that suggested his debt was cleared, Bennett and Khazan report.

    The federal government as a debt collector

    When it comes to collecting medical debts from low-income or uninsured patients, many nonprofit and private hospitals must adhere to federal and state charity-care laws instructing them to "write off" those debts, Bennett and Khazan report.

    By contrast, federal hospitals such as BAMC must use "prompt and aggressive action" to settle debts, according to regulations from the Department of Defense (DOD).

    This regulation came in response to a 2014 report from the DOD's inspector general that found millions in mishandled medical debts at five military facilities, including BAMC.

    To collect these debts, the federal government has the ability to be more aggressive than private debt collectors, Bennett and Khazan report. For example, private debt collectors need a judge's permission before taking aggressive action to collect debt, such as garnishing wages. In comparison, once a debt is transferred to the Treasury Department, the government can withhold wages, tax refunds, or 15% of a person's Social Security income—and it doesn't need a court order to do so.

    A spokesperson for the Treasury Department's Bureau of the Fiscal Service, which handled Gonzalez Jurado's case, told Bennett and Khazan that the department couldn't comment on specific cases for privacy reasons, but added that while it's "required by law to collect debts, [it] works to ensure that debtors are treated fairly and receive proper notices and opportunities to dispute the debts, as well as the chance to repay debts over time."

    A spokesperson for BAMC said that, "Per federal law, [military treatment facilities] do not have the authority to waive, compromise or terminate any debt incurred when a civilian emergency patient is seen." The spokesperson added that "BAMC bills patients once all efforts to collect from insurance companies have been exhausted" and that once a debt is transferred to the Treasury Department, "BAMC may not interfere with collection actions."

    For his part, Gonzalez Jurado said he wasn't sure if he should be relieved to learn the debt was cleared. "I don't know if I should celebrate, because I could get a bill later," he said (Bennett/Khazan, The Atlantic, 1/21).

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