After a year of trying to correct a colonoscopy bill from Crozer-Keystone Health System, Judy Politzer caved, accepted a 15 percent discount, and in October paid off her $1,699 debt.

Or so she thought.

In May, Politzer, 66, of Swarthmore, got a notice from a debt collector for $300 — the amount of the discount she’d gotten.

Furious, she called Crozer’s finance department and was told her account had a zero balance.

So what gives?

Hospitals commonly hand off delinquent patient accounts to debt collectors as a final attempt to recoup unpaid bills. Crozer recently passed on a batch of unpaid patient accounts predating January 2018 to debt collector EOS CCA.

When asked about Politzer’s account, Crozer refused to comment on whether administrators were concerned that other accounts may have been wrongly passed on to the debt collector — and patients being exposed to the possibility of paying again for a bill they had already settled. But the health system encouraged patients who receive a notice they believe is wrong to contact EOS. Crozer employees and their dependents who receive an incorrect collection notice from EOS should contact the health system.

“Outrage, pure outrage” is how Politzer described her reaction. “How dare they?”

Medical debt has skyrocketed in recent years, as out-of-pocket health-care costs continue to rise faster than wages. About 40 percent of working-age Americans now report difficulty paying off medical debt, up from 35 percent in 2005, according to the Commonwealth Fund. Medical debt is the most common type of past-due bill in collections and a top cause of personal bankruptcy.

At the same time, billing errors have become so common that some analysts estimate more than half of bills have a mistake. Patient advocates and billing experts implore people to act immediately if they suspect there is an error by contacting the provider and their insurer, but these bills can be incredibly difficult for patients to fix. Even those who commit to challenging a bill are often defeated when their account is sent to a debt collector — what many interpret as a game-ending move that forces them to decide if they’re willing to risk their credit rating to correct a bill.

“There will always be some consumers who can advocate for themselves, but for most consumers, that’s expecting too much — especially if they have catastrophic medical debt,” said Jenifer Bosco, an attorney for the National Consumer Law Center, which provides legal services for low-income individuals.

Afraid of bad credit

Politzer first contacted The Inquirer last year when she had a colonoscopy in 2017 without anesthesia (yes, it’s possible) but was billed for anesthesia anyway.

She spent months trying to get the bill corrected, but in the meantime, her bill was sent to the collections agency. Crozer had offered a 15 percent discount, which didn’t completely satisfy Politzer, but brought the $1,999 charge down to $1,699. She mailed a check that her bank records show was deposited two weeks later.

“I just wanted to be done with it. I wanted it over, and I really didn’t want it messing with my credit,” she said.

In 2014, FICO, whose credit score is used by the vast majority of lending agencies, readjusted its formula to lessen the significance of medical debt, after the Consumer Financial Protection Bureau published a report that questioned whether credit bureaus were overpenalizing medical debt. Medical debt is different from some other types of debt because it often arises from uncontrollable circumstances and it is more likely than other types of debt to be related to a dispute between insurers and providers.

But medical debt still affects credit scores. How significantly depends on several factors, including the size of the debt and how many medical bill accounts have been sent to collections. A delinquent medical bill may not make much of a difference in an already low credit score, but it could make a dent in an otherwise unblemished credit report.

Debt collectors know how terrified people are of ruining their credit rating, and take advantage, said Justin Song, a lead research analyst for ValuePenguin, a consumer finance website.

“It’s a known strategy for debt collectors to make debtors feel like small fish. They make them feel overwhelmed and next thing, they end up paying thousands of dollars in debt they didn’t even owe because they felt pushed around,” Song said.

Politzer snapped into action when she got the new collections notice.

After confirming with Crozer that she had a zero-dollar balance, she called EOS. The agency told her she needed to provide proof that she’d settled her account with Crozer.

That’s not how it’s supposed to work, billing experts say.

Under the Fair Debt Collections Act, consumers have a right to request within 30 days of receiving a collection notice, proof of the debt the agency is seeking to collect and to dispute all or part of the debt. Agencies are required to tell people of this right and can’t continue trying to collect the debt until they’ve provided written verification of the debt, such as a copy of the bill, according to the Federal Trade Commission.

EOS in 2015 was ordered to pay $2.5 million in refunds and penalties for collecting old cell-phone debt that people disputed and the company did not verify.

The letter Politzer received, which The Inquirer reviewed, does not mention the right to dispute the debt.

The company did not respond to a request for comment.

Federal regulators have stepped up consumer protections in recent years, said Mark Rukavina, a business development manager with Community Catalyst, a health policy group that advocates for affordable care.

Following a New York-based lawsuit in 2015, the three major credit agencies are required to wait six months before recording new reports of medical debt. If an insurance company eventually pays a debt, it should be removed from their report.

Consumers can also appeal a debt collection attempt and request that an agency stop contacting them.

“Unfortunately,” Rukavina said, “the burden is on the consumer to take advantage of these protections.”

Inundated with calls

In the meantime, consumers are inundated with calls and messages from debt collectors.

A third of respondents in a 2017 survey by the Consumer Financial Protection Bureau said the most recent debt collector to contact them made at least four attempts in a week; a smaller group said a debt collector made at least eight attempts a week to contact them.

“Collections agencies are much more aggressive than they were because they have more means to get in touch with you,” said Jill Gonzalez, a senior analyst for WalletHub, a consumer finance website.

More than half of respondents said they’d been contacted by a debt collector for an unpaid bill they did not believe was theirs. But only a quarter who’d been contacted by a debt collector said they had disputed the debt.

Consumers who are unaware of their rights or unable to protect themselves risk damaged credit, which can affect their access to new credit lines, creates stress, and can become its own barrier to health care.

“There have been some improvements ... but it’s still really a broken system for a lot of consumers,” said Bosco, of the National Consumer Law Center.

Politzer confirmed with Crozer and the debt collector her account was initially sent to that she doesn’t owe money to either, and mailed a letter to EOS disputing the bill they say she needs to pay. She hopes it’s enough.