Before I even get into my post, I want to go ahead and get this statement out of the way: I know there are creditors (possibly even medical providers) that are abusive to people who owe them money. That is not the topic or point of this post. This post is about medical providers who are trying nothing else than to collect the money they are owed, for services they have provided, using nothing but what is allowed to them by the law.
The Healthcare Reform created a section of the IRS code for 501c3 hospitals called 501r. In part, 501r lays out many requirements that a 501c3 Hospital must meet before engaging in “extraordinary collection activities.” Recently the IRS released some clarification of the definition of extraordinary collection activities, which gets me to the point of this post, when did ordinary become extraordinary?
According to Merriam-Webster, the definition of extraordinary is “going beyond what is usual, regular, or customary.” The IRS defines the following as extraordinary collection activities: reporting to a collection agency, sale of the debt to another party, placing a lien on an individual’s property, foreclosing on an individual’s real property, attaching or seizing an individual’s bank account of any other personal property, commencing a civil action against an individual, causing an individual’s arrest, causing an individual to be subject to writ of body attachment, and garnishing an individual’s wages.
Now I will consent, foreclosing one’s home, causing arrest, and subjecting to the writ of bodily attachment, are pretty extraordinary. However, the rest- credit reporting, civil actions, garnishments, and liens are part of the normal actions creditors of all shapes, sizes, and kinds take to collect money owed to them. These are all legal actions that are usually highly regulated by State and Federal law. They have been used in the regular, usual, and customary course of business for a very long time. What makes them different now?
In my opinion, the only thing extraordinary are the cumbersome requirements being placed on hospitals to enforce legal contracts (yes, that paper you sign where you agree to pay for your hospital services, is a contract!) in an ordinary and legal manner.