The following is an excerpt from Ontario Systems‘s latest white paper, “Seven Crucial Compliance Conversations for Every Hospital CFO.”

Crucial Conversation #2

“Do we credit report? If so, should we stop?”

On December 11, 2014, the CFPB conducted a field hearing in Oklahoma City on medical debt collection practices and the relationship between those practices and consumer credit reporting in general. The meeting was nothing short of a crystal ball regarding the future of medical debt collection. But somehow, it is one that has gone largely unnoticed by hospitals and the debt collection industry. Let’s review some of the hearing’s most important takeaways.

7 Crucial Compliance Conversations Downloadable CoverCFPB Director Richard Cordray shared the Bureau’s position that problems with debt collection are magnified when the debt collector reports a debt as a collection trade line to the national credit reporting companies. He characterized a collection trade line as a black mark – more like a scarlet letter − on any consumer or patient’s credit report, and explained how having a reported collection item or a severe delinquency can increase that patient or consumer’s interest rate and affect his or her ability to borrow money. He further highlighted some particularly startling statistics from the CFPB’s recent study on credit reporting practices with regard to medical debt:

  • One in five consumers with a credit report has a medical collection item on his or her credit report
  • More than 1.3 billion trade lines are actively reported, and about half of the overall debt collection trade lines are from medical bills
  • Fifteen million consumers have medical debt collection items as the only collection items on their credit reports, and many of them have no other seriously delinquent accounts

It should be noted first that the Director opened the hearing reiterating how debt collection practices have long been a source of frustration for many consumers, making it clear debt collection continues to be a top source of consumer complaints to the Consumer Bureau and to its sister agency, the Federal Trade Commission.

According to Cordray, those sentiments have resulted in a major new development: He explained how as part of the CFPB’s ongoing effort to improve the nation’s credit reporting system, the Bureau will now require the largest credit reporting companies to provide it with regular, standardized accuracy reports, specifying the number of times consumers dispute information on their credit reports during a reporting period, along with furnishers with the most disputes, industries with the most disputes and furnishers with particularly high dispute rates relative to their peers. Cordray’s prepared remarks should be a wakeup call to any healthcare provider, EBO or medical debt collection agency owner. Click here to read.

You can download and read the full Ontario Systems whitepaper from our “free downloads” site.


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