The case of the vanishing collection.

[jonathanrayne]

Greetings, I've been working on my credit repair and reading posts on the AAA forum for about 15 months.
The repair has been going well and I've been lucky with some of the removals. But I'm kind of stumped right now and could really use some solid advice with a question regarding the removal of a medical collection using the HIPAA process. (Hope we can discuss that here.)

I'll keep this brief and state just the facts.

I have a 2 year old medical collection with Escallate for $637. The original creditor is St. Rose Dominican Hospital.

During my credit repair process I received a letter from Escallate about the account so I sent a DV letter to which they responded with proper validation.

After I received validation I sent (on 3 separate occasions)PDF letters offering full payment. About 4 months ago they contacted me by phone and said they'd be willing to accept my PDF but did not want to put it in writing. They were pretty firm on that, and would not budge.

Quite frankly, I didn't trust them and didn't go through with it.

A few months later I became aware of the HIPAA process and thought that would be the best way to go, however about 2 months ago the collection has vanished from ALL 3 reports. I pull my reports at Myfico and Creditkeeper every month and it still has not returned.

How can I move forward with the HIPAA process if the collection is not even there? I'm worried as my score continues to climb that this collection will resurface at the worst possible time. I'd like to diffuse this situation now before that happens. Any advice?

Thank you for taking the time to read this,

John

[soonguynetworks]

You're right about not trusting them if they refuse to put it in writing... I wouldn't. However, in my experience when dealing with an OC they tend to be more honest than a CA. An OC simply wants their money (they could care less about dinging your credit). I had 2 occasions where a medical bill was sent to collections, in both cases I paid the OC directly and the collection disappeared shortly thereafter from my report. This only seems to apply to MEDICAL BILLS, a normal collection will typically stay on (this may be because of HIPPA?)

On a few occasions I have seen a collection disappear from a credit report and then re-appear a few months later. Typically this occurs when a OC sends the account to a CA or re-assigns the account to a different CA. The best advice I can offer you is to pay the collection ASAP (before it re-appears); in my own personal experience if you were to pay Escallate during this period it would not re-appear. Here's why...

The CA (if there is any) is not the party who received the payment (Escallate is) therefore the CA has no authority to report anything against your credit report. Escallate pays a fee to the CA for each account they manage (assuming the account wasn't sold off, if Escallate is still discussing the account with you it means they still own it.). So if the account was paid it wouldn't make financial sense to Escallate to send the paid account to a CA simply to ding your credit. I have used this strategy on multiple occasions and it has worked every time.

With regard to HIPPA when I was cleaning up my credit the law had just gone into effect, there was little knowledge at that time of how the law would actually apply. I was able to resolve my medical bill disputes without use of the law.

[Lian]

Payment could only go to the party who has active collection authority. If CA1 has had their collection authority terminated, and the OC has reassigned the collection to CA2, then you could not pay CA1 in order to prevent CA2 from reporting. CA1 would no longer have any authority to accept payment.

It is likley that you dont know the internal business dealings of the OC and their current debt collection assignments, so you could logically assume that CA1 is still authorized. If CA1 then accepts payment, they are prima facie representing themselves as having active collection authority.

So yes, since CA1 is the only party currently representing themselves as an authorized agent of the OC, you can pay them. But if they arent and CA2 squawks, it could cause a mess. Then the OC would have to defend their acceptance of debt through an unauthorized source.