The review includes a request for public comment on the products, as well as associated medical billing and collection processes, in advance of a July 11 CFPB hearing on the topics.
07/07/2023 12:35 P.M.
4 minute read
In the latest of its actions related to medical billing and collections, the Consumer Financial Protection Bureau is seeking public and stakeholder comment on financial products such as medical credit cards and installment loans as well as debt collection and credit reporting practices of the companies that originate and service these products.
The public inquiry is in partnership with the U.S. Department of Health and Human Services (HHS) and U.S. Department of Treasury (Treasury).
“Today’s request for information builds on CFPB research on medical payment products and medical billing and collections, in addition to other actions by the CFPB and federal agencies to relieve the burden of medical debt and collections practices,” according to a news release from the bureau.
The “agencies seek information about the prevalence of these products, patients’ experiences with them, and health care providers’ incentives to offer these high-cost products to patients, which may include avoiding the insurance claims process and financial assistance programs,” the bureau reports.
The CFPB released the research on financing mechanisms for consumers’ out-of-pocket health care costs in May, ACA International previously reported.
The report, “Medical Credit Cards and Financing Plans,” focuses on “alternative financing products” that the bureau says are being generated at a growing rate by financial institutions and fintech companies.
“Medical payment products can offer the promise of cost savings, payments within a few days, administrative ease, and a way to minimize financial risk,” said CFPB Director Rohit Chopra in a speech before the American Association of Healthcare Administrative Management in May. “But our research illustrates that patients can be worse off.”
The CFPB found that consumers have used “specialty medical credit cards or loans with deferred interest periods to pay for almost $23 billion in health care expenses for more than 17 million medical purchases from 2018 to 2020,” according to a news release on the report.
Agencies Seek to Understand Consumers’ Use of Payment Products
The federal agencies’ request for comment will help them understand “harms and financial challenges raised by specialty medical payment products,” the bureau reports.
Specifically, the agencies are requesting information about:
- Data and comments on the interest and fee costs for these products, as well as in understanding their marketing, application and approval processes. The CFPB is also interested in trends of medical payment product use, including the total outstanding consumer debt on medical credit cards, medical installment loans and other medical payment products. The data will help the agencies better understand how these products are being used, their scope of use and who controls that use.
- Product risks, and whether consumers fully understand the risks.
- How medical credit cards and loans may exacerbate existing issues in health care billing and collections, such as charges to uninsured and out-of-network patients compared to those negotiated by in-network insurers for the same medical services.
- Incentives offered to health care providers to promote medical payment products, as well as how those incentives affect the promotion of these products by providers to patients.
“This inquiry builds on the [d]epartment’s work to protect patients from unfair billing practices, lower costs, and increase transparency in our health care system,” said HHS Secretary Xavier Becerra. “Hearing directly from patients about their experiences will help shape policies that can prevent families from incurring medical debt.”
Public comment will open when the inquiry is published in the Federal Register and will be due within 60 days of publication.
July 11 Hearing on Medical Payment Products/FCRA Rulemaking
The CFPB is hosting a hearing with leadership from the White House, HHS and the Treasury on July 11 to discuss medical billing and collections, with a focus on medical payment products.
Chopra will provide remarks along with White House, HHS and Treasury officials. Community organizations, advocates and members of the public will also attend the hearing, available in person and via live stream.
RSVP for the hearing on the CFPB’s website.
Meanwhile, the CFPB has also announced a pre-rule related to the Fair Credit Reporting Act, ACA previously reported.
The CFPB subsequently announced a Small Business Regulatory Enforcement Act (SBREFA) panel related to proposed rules for credit reporting.
In regard to the FCRA rulemaking, ACA has pointed out that the CFPB does not have jurisdictional authority over many issues related to medical debt and has limited authority under the FCRA to engage in rulemaking in this area, according to an ACA letter (PDF) to Capitol Hill on the CFPB’s semiannual report to Congress.
ACA will be working with members participating in the SBREFA process for the proposed credit reporting rules and identifying both legal and policy concerns with CFPB actions related to medical debt.
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