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CFPB Report on Medical Debt Needs Additional Context and Understanding About the Debt Collection Industry

The CFPB medical debt report lacks attention to the stringent processes health care providers and debt collectors have in place to resolve a payment and ensure it is accurate before it is placed on a consumers’ credit report. Editor’s note: This article is available for members only.

03/01/2022 4:00 P.M.

5 minute read

The Consumer Financial Protection Bureau has released a report about the U.S. medical billing system and the credit reporting infrastructure connected to medical debt.

The bureau’s research unfortunately focuses on the back end of the credit cycle and gives consumers a false impression that the debt collection industry is responsible for billing issues that occurred on the front end, contrary to the explicit goals of the No Surprises Act.

While the CFPB estimates that there is $88 billion in medical bills on consumers’ credit reports, the bureau’s report lacks attention and context to the stringent processes health care providers and debt collectors have in place to resolve a payment and ensure it is accurate before it is placed on a consumers’ credit report—all with the goal to help that consumer.

“When it comes to medical bills, Americans are often caught in a doom loop between their medical provider and insurance company,” said CFPB Director Rohit Chopra in a press release on the report. “Our credit reporting system is too often used as a tool to coerce and extort patients into paying medical bills they may not even owe.”

The CFPB’s press release states that medical bills placed on credit reports can result in reduced access to credit, increased risk of bankruptcy, avoidance of medical care and difficulty securing employment.

“The CFPB’s research does not seem to grasp the existing infrastructure related to medical debt that has strong safeguards for consumers to dispute any amounts that are in question or that they feel they don’t owe. If a consumer disputes a bill, there are procedures in place to ensure credit reporting is paused while the issue is being resolved,” said ACA International CEO Scott Purcell. “There are also controls in the communication of the debt well in advance of any credit reporting through Regulation F and its predecessor rules.”

The CFPB’s report describes patients being stuck in the middle of disputes between medical providers and insurance companies.

The CFPB’s report also references the No Surprises Act. However, the CFPB’s research misses the mark by not addressing the serious systemic problem of insurance companies not paying claims. Congress, in the No Surprises Act, focused on the need for insurance companies to do a better job paying claims for medical care provided, and not surprising patients with unjustified out-of-network bills.

“We stand with the CFPB in our

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