You can look at the number of agencies that regulate our hospitals and be overwhelmed by the sheer number. Until, that is, you realize that none of these agencies regulate debt collection and billing accuracy for patients who are privately insured or uninsured. In contrast, if your health coverage is a government-funded insurance like Medicare and Medicaid, there are many, many rules and regulations that spell out exactly about how, when, and how much can be collected from you by a hospital.

So why is there no billing/debt collection oversight when it comes to the privately insured and uninsured? It would be hard to say exactly how this weird omission emerged, but for most of the last century the enduring assumption was that hospitals - of course - would cater to people who were privately insured. And, for the uninsured, well, let's face it, they were on their own in more ways than just debt collection. What few regulations exist are geared almost solely to the uninsured. I contacted the California Hospital Association on August 6th, who did not respond to a request for interview about this story. However, the Hospital Council posted this comment on the first article in this series: "Hospitals also are required to establish a charity care policy and discount payment policy for patients whose families are at or below 350 percent of the federal poverty level, according to a California state law that went into effect on January 2007. Under state law every hospital is required to provide patients with a written notice about the availability of discount payment and charity care policies. Additionally, hospitals must post signage regarding the existence of its discount payment and charity care policies in locations that are visible to the public throughout the hospital." Enforcement of existing rules in almost non-existent (for example, there was no posted sign about financial assistance in the Children's Hospital Billing Office, and also see the hospital responses below about when patients get sent to collections). Even with complete compliance with existing regulations, however, financial assistance (even minimal) for the very poor depends on individual discretion of the hospital employee. The middle class, those with insurance disputes, and the under-insured are all left hung out to dry.

Why should you care? Isn't this a rare problem? Medical debt collection - even used against those with insurance - is an exploding business. For an eye-opening look at the industry (with hospitals at the center of the mix) check out the excellent MSN Money Liz Pullam Weston article titled "Why medical debts shouldn't count.""Medical collections are surprisingly common, at least according to a 2003 Federal Reserve study of consumer-credit reports. Nearly one in three consumers (31%) with a credit report had at least one collection account reported, and more than half of those were medical collections. The amounts owed weren't substantial: 36.5% of the medical collections were for $100 or less, and 86% were for $500 or less." The median amount reported was $142. She points out that in just the last few years more and more hospitals and doctors' offices go straight to debt collection, and, of those debt collectors, more and more go straight to negative marks on credit scores (which will impact your loan and credit card rates and fees, on average, for 7 years) as an "incentive" to get patients to pay off their debts. The article covers the story of a family who received a bill from a doctor no one remembers ever seeing for $540 two years after a hospitalizationwith an accompanying threat to send the family to collections if it's not paid promptly. Which can't help but leave you wondering if this process is no more than a form of medical-debt extortion.

And, to add even more stress to the mix, hospitals are already well-documented to have many many errors in their billing processes. Hospitals also usually (in patient-insurance disputes) state up front that the bill is solely the patient's obligation - a situation that leaves the insurance company with no motivation to pay in a timely manner.