Dealing with Medical Debt

Medical debt collections can feel overwhelming, especially while you are dealing with health issues. This guide explains:

Medical debt lawsuit time limits, interest caps, and billing rules
Your rights under both Colorado law and the federal No Surprises Act
What to do next for a medical debt lawsuit

What is medical debt?

Medical debt means charges for health care services or medical items. It does not include medical expenses you put on a credit card. Credit card debt has different rules.

What rights do I have under Colorado law?

Payment plans: If you agree to pay your medical debt in 4 or more payments, the collector must give you a written plan within 7 days, showing:
- The interest rate (capped at 3% per year), and
- The final payoff date
Before default: A collector must try to contact you twice and send a written notice before accelerating your debt. Accelerating means they demand the full amount right away instead of letting you make payments.
Pause during insurance reviews: If you’re appealing an insurance decision, or appealed within the last 63 days, collectors must stop all collection efforts and credit reporting, and withdraw any lawsuit already filed.
Interest cap: Medical debt interest is capped at 3% per year. This doesn’t apply to credit card debt.
Credit reporting: Most medical debts can’t appear on your credit report. If they are reported by mistake, you have the right to dispute them. These protections last through July 1, 2028.
Hospital collection limits: Hospitals must wait at least 182 days after your care before suing you or taking money from your bank account or paycheck. They must:
- Send you a notice at least 30 days in advance
- Tell you about financial help programs
- Screen you for discounted care eligibility

What is the No Surprises Act (NSA)?

The No Surprises Act is a federal law that protects you from unexpected bills in 2 situations:

Emergency care at an out-of-network hospital. This doesn’t cover ambulance rides.
Related services provided during a covered, in-network procedure.

Important!
You can’t be charged more than your in-network cost-sharing for these services. These bills must count toward your deductible and out-of-pocket maximum.

What if I get a surprise bill?

Call the No Surprises Help Desk at 1-800-985-3059.

You may also file complaints with Colorado’s Division of Insurance.

Note:
The Division of Insurance doesn’t have the power to regulate every health insurance plan. Most employer-provided health insurance follows a different law. Check the back of your insurance card to learn who oversees your plan.

What does the Federal Price Transparency Act do?

Hospitals must post their prices publicly. They have to list 5 types of charges for basic procedures, including the cost they have agreed to with insurance companies and their cash prices. They also must offer a price estimate for at least 300 common services.

Important!
If a hospital doesn’t follow the Federal Price Transparency Act rules, they can’t legally bill you. This law only applies to hospitals.

Step-by-step guide: What to do next

Step 1: Check if the debt is medical

Make sure the collector labeled the debt the right way. Also check whether Colorado or federal laws apply.

Step 2: Review defense options

Use Insurance Appeal Protections: If you’re appealing an insurance decision, tell the collector in writing so they must stop collection. Appealing an insurance decision means asking for a review of something you disagree with.

Check for Violations: If the collector or hospital didn’t follow required steps (like providing a payment plan or waiting the required time), you can raise this as a defense in court.

Check Credit Reporting: Dispute any medical debt incorrectly placed on your credit report.

Check Interest Rates: If the interest is more than 3%, you can challenge it.

Check for Surprise Billing: If you think you got an illegal surprise bill, you can dispute it.

What can I do right now?

Gather All Documents: Keep copies of billing statements, notices, and any letters from collectors.
Track Timelines: Write down when you got care and when collection actions began.
Ask for Written Payment Plans: If you plan installment payments, demand they send you written confirmation.
Ask for Proof: Collectors must show you detailed information about the debt.
Use Both State and Federal Laws: You can raise defenses under Colorado law and the No Surprises Act.
Compare the bills you receive with your explanation of benefits from your insurance company. If your Explanation of Benefits says you owe “0” for the service and you receive a bill, this is a billing mistake.
Contact your insurance company to make sure the service and provider are in-network before you have the procedure. Do not just trust what the doctor’s office tells you.

What questions should I ask myself?

Did the collector or hospital give you all required notices?
Are you currently appealing an insurance decision?
Is the interest rate on your medical debt more than 3%?
Has your medical debt been reported to credit agencies?
Were you billed out-of-network costs at an in-network hospital?

Important!
You have many protections against unfair or early collection of medical debt. Staying organized and asserting your rights early can make a big difference. If you need help, consider calling the No Surprises Help Desk (1-800-985-3059) or speaking with a qualified attorney.

Need more help?

If you are low-income, a senior, or a veteran, you may qualify for free legal help from Colorado Legal Services (CLS). To apply or ask if you might qualify, go to the CLS website and find the office that serves your area. If you call or visit, CLS can help you in your native language.

You can get help from the courts. Every judicial district has staff called “Sherlocks” to help people with their legal questions. To find the Sherlock in your county, visit the Judicial Department’s Sherlock webpage.