The Rules Around Medical Debt Changed — Here's What That Means
In recent years, the three major credit bureaus and the CFPB implemented significant changes to how medical debt appears on credit reports. As of 2023, medical collections under $500 are no longer included on credit reports at all. Medical collections that were previously paid have been removed. And the waiting period before medical debt can appear on a credit report was extended from 6 months to one year.
If you have medical collections on your report that are under $500, they should not be there. If you have paid medical collections still showing up, they should be gone. If you have a medical bill from the last year that appeared before the new waiting period, that's disputable too. These changes affect a lot of people who haven't checked their reports recently — and many are still carrying medical debt damage that they no longer legally should be.
Medical Billing Errors Are Extremely Common
The medical billing system is a mess. Insurers reject claims, providers rebill with different codes, patient payments get misapplied, and collections get sent on amounts that were already covered or paid. Studies suggest roughly 80% of medical bills contain some error. That means a high percentage of medical collections on credit reports are for amounts that aren't actually owed — or aren't owed by the right person.
CleanSlate requests itemized bills on medical collections and compares them against insurance EOBs when clients can provide them. Errors in the underlying bill create grounds for dispute under the FDCPA. Even when the debt is legitimate, if billing errors exist in the amount claimed, the collection can often be challenged.
Debt Validation for Medical Collections
Medical collections — especially older ones or those purchased by third-party debt buyers — are good candidates for debt validation letters. Hospitals routinely sell old receivables to debt buyers who often don't have complete records. When we send a proper validation request and they can't produce the original itemized bill and proof of the chain of ownership, they legally can't continue collecting or reporting.
Between the new CFPB rules, billing error disputes, and debt validation, many clients see all or most of their medical collections removed within the first two to three months.