ACA International, the Healthcare Financial Management Association (HFMA), and other stakeholder organizations representing credit bureaus, consumer protection agencies, and more, earlier this month distributed to their respective members proposed medical collection guidelines that, when finalized, sponsors hope will find wide acceptance by the healthcare industry and its business partners.

The Medical Debt Resolution Overview,” lays out specific recommendations on how to approach medical debt for collection purposes; it even includes a step-by-step workflow with recommendations on how providers and their collection-related partners should manage the debt collection process.

The proposed guidelines and flowchart were released to members of ACA International, HFMA, and other stakeholders in early August. ACA Members have until Tuesday, September 3 to comment by e-mailing Lucia Lebens, director, federal government affairs, ACA International at, or calling her office at (202) 547-2670.

Among the task force’s recommendations:

  • Allow patients 120 days to pay bill before reporting to a credit agency. The proposed IRS 501(r) regulations for nonprofit hospitals defining “extraordinary collection actions” will require this, should they be enacted. The guideline also mirrors proposed changes to the Fair Debt Collection Practices Act (FDCPA) in a bill introduced in the U.S. House in late May. However the proposed guidelines differ from the proposed IRS regulations in that there is no second 120-day period to allow a patient to file a financial assistance application.
  • Removing paid medical debt from credit reports within 45 days. This is a cornerstone of the proposed Medical Debt Responsibility Act currently working its way through Congress. The task force is recommending that this be considered a best practice, and that to make it logistically possible providers, their credit agency partners, and credit bureaus conduct regular reconciliations of patient accounts.
  • Standardize “collection process clock.” The proposed guidelines recommend that the collection process clock starts at first statement date from provider’s system.
  • Collection partners adhere to provider’s policies and procedures. All vendors and partners involved in the collections workflow need to adhere to the provider’s policies and procedures. In addition, “policies related to extraordinary collections activity (ECAs) (as defined by the IRS—i.e. liens, credit reporting, lawsuits, wage garnishments, or sale of debt) are board approved, and communicated to and practiced by collection agencies.”
  • Providers and partners must regularly reconcile accounts. “Regular reconciliations should occur between provider system and business affiliate system.”
  • Track and report patient complaints. “All business affiliates involved in account resolution activities are required to report patient complaints.”

Getting ahead of regulation and legislation

It is no coincidence that many of the guidelines mirror proposed federal legislation and regulations. “If these people are going to be regulating us, there’s a lot of work we can be doing proactively,” says Lucia Lebens, director, federal government affairs, ACA International. Lebens represented ACA International on the task force. “If we don’t do it, they’re going to do it for us.”

Not all the guidelines follow the proposed legislation and regulation. For example, one of the guidelines allows that “transfer of accounts between provider and business affiliates can occur at any time in the debt resolution process.”

The HFMA side of the task force is also seeking feedback on possible future guidelines, such as full-file credit reporting– when payments are reported as a positive mark on an individual’s credit report—and wants to know what issues need to be explored to fully understand the impact of full-file reporting and what are the pros and cons of full-file reporting for organizations that currently negatively report. ACA International representatives, however, believe such a regulation would be burdensome and technically difficult to implement.

What the proposed guidelines don’t do is “diminish patient responsibility,” says Lebens. “We see patients playing an active role.”

Next steps 

Once all the stakeholder organizations have commented, the task force will reconcile and consolidate the guidelines into one, overarching document, which will then be sent to the stakeholder boards—HFMA, ACA International, and others—for consideration and if approved released to members and the public.

If ratified and complete, the organizations would like to take the document to Washington, D.C., with the goal of educating regulators and lawmakers.

The scope of the task force was specific, only examining the business process from when the bill drops to when the debt is resolved, with one exception: patient education. According to the proposed guidelines:

Patient education should begin at scheduling for elective services and as soon as possible for emergent services once the Emergency Medical Treatment and Active Labor Act (EMTALA) has been satisfied. Patient education should occur at each touchpoint possible (e.g. pre-registration, registration, discharge, account resolution events). Education should include discussion of available financial assistance, public assistance programs, and available payment options, as well as what to expect during the account resolution process. Conversations prior to service should include an estimate of the patient’s responsibility for services where possible … Patient education should be reinforced throughout the account resolution process.

Genesis of the guidelines

The idea of a joint task force originated in December during the hearing over proposed IRS regulations. “It was clear from the hearing that a lot of education was needed,” says Lebens.

HFMA’s Richard “Rick” Gundling, vice president, and Chad Mulvany, technical director for reimbursement and regulatory issues, broached the idea of putting together a task force to help the education process.

“They had asked if we’d be interested in forming a task force and working with others who feed into the medical debt world,” Lebens says. “We saw it as a chance for our industry to be involved in the public policy debate surrounding medical debt.” This includes credit reporting agencies and consumer groups.

The group met earlier this year in Chicago, which is where the original kernel of proposed guidelines was developed, both workflow chart and best practices. Over the past several several months the documents have been massaged until their release.

The documents represent a compromise by all involved. No one is necessarily happy with 100 percent of the guidelines, says Tom Gavinski of I.C. System. Gavinski served on the task force representing collection agencies, but also has extensive experience on the provider side. For example, the credit reporting agencies are not pleased with the concept of deleting medical debt from credit reports once it is paid, but have compromised for the greater good.  “There actually is some positive opportunity for providers and collection outsourcers to work through this issue with legislators, regulators and consumer groups,” he says.

“Some appreciate that the writing’s on the wall,” says Gavinski, as regulators and lawmakers are putting increased scrutiny on healthcare collections. Others in the industry fear that “somebody might take it a step further and make the rules more stringent.”

According to Gavinski, the task force has so far received many good suggestions. It has also received push-back, but that usually has diminished once someone from the taskforce walks the critic through the guidelines he says.  “The credit reporting guidelines are the most controversial and need some vetting with all the stakeholders,“ he says.


Editor’s Note: The Research Library is currently featuring a publication on the relationship between hospitals and debt collection agencies. Learn more.


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