HIPPA, the Health Insurance Portability and Accountability Act of 1996 was designed to improve the efficiency of the healthcare system in the United States. The Department of Health and Human Services published rules and guidelines to standardize the administration and financial electronic information for patients. Certain businesses like medical labs and other medical offices will share medical information on patients. HIPPA mandates how that information is stored, maintained, and secured.
 
HITECH, Health Insurance Technology of Economic and Clinical Health, act includes new Business Associate requirements. The act also mandates that there are now civil and criminal penalties for violations of HIPPA. Medical service providers who disclose medical infomation for the purpose of treatment are NOT business associates. Business Associates are companies who conduct business with medical service providers but do not participate in the treatment. A collection agency is an example of a Business Associates.
 
Capital Collections, LLC does not have any medical information on accounts assigned for collection. All collection agencies must have a Business Associates Agreement with a medical provider who assigns an account for collection. Many of our medical billing clients who assign accounts for collection will use multiple agencies to service their numerous clients. When Capital Collections, LLC first required the Business Associates Agreement with those clients, they questioned us about the Agreement because they stated no other collection agency, at the time, was requiring the act.
 

Am I Responsible For Attorney’s Fees?

If the attorney for a collection agency sues you, the prevailing party is almost always granted attorney’s fees. If you are sued for $2,000 and the Court determines that you only owe $1,000, the collection agency is the prevailing party. The prevailing party is the litigant who received the greater relief in the action.
 

How Much Would The Attorney’s Fees Be?

Attorney’s fees are determined by contract or statute. If the collection suit is based on a written contract, the award of attorney’s fees is based on a Court Fee Schedule if not trial is held. The amount is usually based on the amount of the suit. The larger the amount of the suit, the more the attorney’s fees will be awarded. If the defendant files an answer and there is a trial, the amount of the award is within the Court’s discretion. The award can be based on the attorney’s hourly rate and the amount of time spent in pretrial preparation and the hours spent for the trial to occur. Our attorney has sued cases for the amount of $700 and the award for attorney’s fees has been $1700 plus court costs that are $250 or more.
 
Attorney’s fees can also be awarded by statute. California Civil Code Section 1717.5 awards attorney’s fees on cases where there was no written contract between the litigants but there was agreement to extend credit for the work, services, or product provided. Under this statute the attorney’s fees are based on a percentage of the amount sued.

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