Receiving a collection notice for a medical bill can be unsettling. Many people assume that once a bill reaches collections, the opportunity to raise questions or challenge the amount has passed. In Minnesota, that is not necessarily true.
Medical billing moves through stages, and at each stage there may still be opportunities to review, dispute or resolve the balance.
A Medical Bill Does Not Immediately Become Collections
After treatment, your provider submits a claim to your insurer. You then receive an Explanation of Benefits (EOB). An EOB is not a bill. It’s an explanation of what was billed, what insurance paid and what portion may be your responsibility.
Only after insurance processes the claim does the provider send a billing statement. Many providers send multiple statements over several weeks or months before transferring an unpaid account to collections.
Minnesota law does not set a single deadline that requires a healthcare provider to wait a specific number of days before using a collection agency. The timeline often depends on the provider’s internal policies.
That said, some legal protections do affect how quickly certain hospitals can escalate.
Special Rules for Nonprofit Hospitals
Many hospitals in Minnesota are nonprofit organizations. Under federal law, nonprofit hospitals must wait at least 120 days from the first post-discharge billing statement before taking certain “extraordinary collection actions,” such as:
- Reporting the debt to credit bureaus
- Selling the debt to a third party
- Filing a lawsuit (which is required before wages can be garnished)
Nonprofit hospitals must make reasonable efforts to inform patients about financial assistance policies and allow patients at least 240 days from their first post-discharge billing statement to apply.
These requirements apply only to nonprofit hospitals. Private physician offices, specialty clinics and for-profit facilities are not subject to these federal rules and may follow different internal timelines.
When an Account Is Sent to a Collection Agency
If a balance remains unpaid, the provider may transfer it to a third-party collection agency. When that happens, you should receive a written notice from the collector.
Under federal law, you have 30 days from receiving that notice to request validation of the debt. This allows you to ask the collector to verify the amount and identify the original creditor.
Being in collections does not automatically mean the amount is correct or beyond review.
What Can Still Be Disputed
Depending on the stage of the process, different issues may still be addressed. Before collections, you may be able to:
- Appeal an insurance denial
- Correct billing or coding errors
- Resolve duplicate charges
- Apply for hospital financial assistance or charity care
- Request a payment plan
After the account is placed with collections, you may still:
- Dispute the balance if it does not match your EOB
- Request documentation supporting the amount claimed
- Raise identity or account errors
- Negotiate a settlement or payment arrangement
Even if the account appears on a credit report, Minnesota law provides some additional protections for medical debt. For example:
- Unpaid medical debt generally cannot appear on a credit report until it is at least one year old
- Medical collections under $500 are not reported to credit bureaus
- Once medical collections are paid, they should be removed from credit reports
Being contacted by a collector does not automatically mean your credit has already been damaged.
Why Accounts Escalate
Medical bills do not escalate only because someone refuses to pay.
Health insurance coverage is complex, and billing statements can be difficult to interpret.
Some patients assume an Explanation of Benefits means everything listed was covered by insurance. Others intend to review a bill later but set it aside and forget.
Address changes, insurance processing delays and simple confusion can all contribute to missed deadlines.
Anxiety can also play a role. Large medical balances can feel overwhelming, and it is common to delay dealing with something that feels insurmountable.
In any of those scenarios, options still exist. Providers and collection agencies are often willing to discuss payment arrangements or reduced settlements. Even when full payment is not immediately possible, starting a dialogue may prevent further escalation.
Getting Legal Assistance for Medical Debt in Minnesota
An attorney may be able to help you understand your rights and what your options are moving forward. A Minnesota Lawyer Referral and Information Service referral counselor can help you connect with a qualified Minneapolis–St. Paul attorney with experience representing people in your situation. Call (612) 752-6699 to speak with a counselor or start the process online using our self-referral service.
