Medical debt nightmare: Why a local woman could end up paying over $5,550 for her $294 doctor's visit - East Idaho News

Medical debt nightmare: Why a local woman could end up paying over $5,550 for her $294 doctor’s visit

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EDITOR’S NOTE: This is the first part in a series of stories about medical debt and Medical Recovery Services.

Here are the other installments:

— Part 2. Man fights 5-year legal battle with debt collection company after doctor’s error

— Part 3. How Medical Recovery Services takes care of business

— Part 4. Medical debt, collections and the fees you’ve probably never heard of

IDAHO FALLS — She only got a few stitches — nothing glamorous or lifesaving.

And yet, years later, Mary Johnson is still feeling the impact of that doctor’s visit.

Johnson agreed to talk with if her real name was not used because she is worried about the legal repercussions she may face for speaking out. She is fighting a local debt collection company over a now-paid $294 bill and may be required to pay as much as $5,583.25 depending on a judge’s ruling. The massive increase is in large part due to attorney fees and legal battles largely beyond her control.

This week is taking an in-depth look at Medical Recovery Services, a company that appears to be making a lot of money from attorney fees and debts that have often been satisfied.

Here is Johnson’s story.

The debt

Johnson isn’t sure she actually remembers the doctor’s visit that started the chain of events. She believes it was from a 2011 trip to an emergency room or urgent care where she needed stitches for an injury.

Everything seemed fine and after the dust settled, court documents say she owed $294 to Intermountain Emergency Physicians, a billing agency that handles payments for local doctors.

Johnson claims she never received a bill for the service and forgot about the visit.

The unpaid balance ended up at Medical Recovery Services, an Idaho Falls-based debt collection company. Attorneys Bryan Smith and Bryan Zollinger handle debt collection for Medical Recovery Services. Zollinger also serves in the Idaho House of Representatives.

zollinger smith
Attorneys Bryan Zollinger, left, and Bryan Smith handle cases for Medical Recovery Services.

Between July 2013 and July 2017, Medical Recovery Services aggressively pursued Johnson’s debt. Smith says the collection agency sent 47 written notices for payment and attempted to collect by phone five times. It’s unknown how many letters or calls Johnson actually received and Smith claims the woman was using as many as four aliases.

Eventually, they did track her down and in 2018 filed a lawsuit against Johnson for the unpaid debt.

As is the case in the majority of debtor claims, Johnson didn’t respond to the lawsuit. As a result, a judge issued a default judgment against Johnson for a total of $976.41. That’s the original debt, plus interest and attorney fees.

Smith and Zollinger then received a court order to garnish Johnson’s wages from Melalueca, where she was employed.

That’s when things became complicated.

The lawsuit

A problem arose almost immediately. Even though Medical Recovery Services had a court order, it didn’t have the correct information to pursue the debt.

“Melaleuca received a garnishment document that didn’t match any name of any employee,” Melaleuca attorney Andrew Law tells “Melaleuca couldn’t guess, and potentially guess wrongly, as to who the true judgment debtor was.”

The Social Security number on the garnishment was Johnson’s, but the last name didn’t match hers.

Melaleuca proposed that Medical Recovery Services send the Wellness Company a legal notice, called an interrogatory, asking the name of the employee with the Social Security number printed on the garnishment. Melaleuca would then respond with the information, and the garnishment could move forward.

Legal filings show Law called Medical Recovery Services on June 20, 2018, and then followed up with an email.

“I indicated that Melaleuca is willing to work with you and that Melaleuca doesn’t believe it is necessary to take this dispute to the court,” Law wrote.


Smith and Zollinger refused and the case ended up in court.

Court proceedings

On July 17, Smith and Law appeared before Magistrate Judge Michelle Mallard in Bonneville County.

“We’re here today your honor because plaintiffs have not been careful in how they’ve pursued their garnishment efforts in this case,” Law said, according to court recordings obtained by “Plaintiff did not carefully ensure its garnishment documents accurately named a Melalueca employee as the judgment debtor.”

Law continued, “Melaleuca invited (the) plaintiff to propose a solution…that could have consisted of a simple discovery request, but plaintiff chose not to take Melaleuca up on that invitation.”

Smith called the matter a “misunderstanding” and argued that Melaleuca attorneys misunderstood legalities.

“It may be because they don’t do this kind of work. I can understand that – few people do it,” Smith said. “They completely get the statutes wrong. I’ll show the court how that’s the case.”

Smith wondered aloud why Melaleuca was “making such a big deal out of this,” and Mallard responded that Melaleuca might be concerned about identity theft.

“Maybe that doesn’t appear to them that their employee is the same person and that (Johnson) has been using their employee’s Social Security number, and they don’t want their employee to be subjected to these actions of someone who may have already taken her identity,” Mallard said.

Smith replied, “It’s all rank speculation. We don’t know. But we’re going to get to the bottom of it.”

And they did. Mallard ruled against Medical Recovery Services and said Melaleuca’s response to the garnishment was “true and sufficient,” discharged the company from any liability and told Smith he could ask Melaleuca the name of the employee – something the company had already offered.

Court documents show Smith sent an interrogatory, learned the employee’s name, garnished her wages and obtained $1,272.55 — nearly $1,000 more than the original bill.

But the case has just gotten started.


Fees and more fees

Legal documents show Smith filed an application in March 2019 to be awarded supplemental attorney’s fees. That means he wants someone to pay for the time Medical Recovery Services spent on Johnson’s case after it was supposedly settled.

Smith is requesting that Johnson pay him $5,583.25 – nearly 20 times the amount of the original medical bill.

“Under the law, we get to ask the court for what’s called post-judgment attorney fees for the work we had to do after the judgment to satisfy the judgment,” Smith told in a phone interview last week. “It is kind of her fault because she could have come in and made payments. She could have told the lawyers at Melaleuca, ‘Don’t fight this, guys, because I don’t want to have to pay.'”

Smith argues that Melaleuca should have asked Johnson if she was the person listed on the garnishment and tell her Medical Recovery Services was trying to collect her wages.

“Melaleuca put up a huge fight, and the only reason this happened is that Andrew (Law, Melaleuca’s attorney) didn’t go to her and say, ‘This isn’t worth the fight. You’re going to have to pay it eventually anyway, so let’s just go ahead and let them take the garnishment.’ That’s what he should have done,” Smith says.

Law says Melaleuca has responded to garnishment requests from Smith in the past without any problems, but this was a different set of circumstances.

“Debt collectors have a duty to ensure they know the true identity of the debtor,” Law says of Smith’s argument. “Employers don’t have that duty, and employers can’t guess lest they expose themselves to potential liability and problems with the employee.”

Even though the judge ruled against Smith, he stands by his actions.

When asked if his firm did anything wrong in this case, he quickly responded, “Absolutely not.”

What next?

Smith believes Johnson should pay him $5,583.25 for the time he says he spent on his case, and he will make that argument in front of Judge Mallard on April 22.

Melaleuca is providing help for Johnson to fight the lawsuit.

“Melaleuca believes that turning a few hundred dollar debts into more than $5,000 in attorney fees is simply unreasonable,” Law says. “For that reason, Melaleuca has worked with the judgment debtor, in this case, to help her secure competent counsel so she can defend herself.”

Johnson is just one of many people Medical Recovery Services has sued over the years. Tomorrow on, hear from a man sued by MRS over a mistake his doctor made. He fought all the way to the Idaho Supreme Court and won. Then later this week, hear from people who say their legal battles with MRS weren’t so bad. If you have a debt collection story you believe the public should know about, email

DISCLAIMER: In 2015, Melaleuca CEO Frank VanderSloot provided the seed money to launch For a short time, he was an owner. He has never had anything to do with the operations of Over a year ago, he totally divested his ownership.