Hospital Overcharges Discovered After Signing A Settlement with Debt Collection Law Firm

I was served with a debt collection lawsuit for an unpaid debt at a hospital. The amount seemed high, but I was not sure what to do and was afraid of having a default judgment entered against me, if I did not do something before my due date to respond to the complaint. I had not contacted any lawyer, so I did not know my rights.  I spoke with someone from the collection lawyer’s office and they sent me a stipulation agreement to settle in full, which I signed and returned, because the payments were affordable. I now learned from reviewing the hospital’s billing records that I was badly over charged and the amount that I agreed to pay was much more than I really should owe. What can I do about this?

My response:
Hospital overcharges and billing errors of uninsured patients are one epidemic that the medical profession has not done much to address. I have represented consumers sued on medical debts, including a couple of cases involving hospitals, which resulted in substantial billing adjustments for improper or excessive charges and errors.  Negligent or ineffective treatments may be one further area for adjusting excessive bills, when appropriate and timely raised by the patient.

In this situation, courts typically enforce written settlement agreements, unless you have convincing evidence that the agreement was induced by fraud. The fact that you did not investigate the bill before signing the settlement agreement may not be enough to avoid the settlement afterwards. Before deciding to not pay the settlement, please consult an attorney with the documentation and any evidence of fraud.  Not paying a settlement usually allows the debt collection attorney to obtain a full money judgment against you, which may make a bad situation worse, as this will show up on your credit report, wage garnishment, and levies on your bank account.

Robert Stempler
Twitter @RStempler

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