Medical Bill Interest: Can Collection Agencies Legally Charge It?

In most cases, collection agencies cannot charge interest on medical bills. While some state laws may allow it, consumer protection laws generally prohibit hospitals and collection agencies from charging excessive fees or adding finance charges to unpaid medical bills.

Interest on medical bills can only be charged if it was agreed upon in a contract that you signed when you received medical services. This does not apply to surprise medical bills from medical providers that are out-of-network.

If a collection agency is attempting to charge interest on a medical debt, you should contact your state's consumer protection agency to inquire about your rights and options for handling the situation.