The healthcare provider community has been distracted from its central role of providing quality clinical care. Instead, providers and hospital financial executives are grappling with insurers under pressure, uncertainty about the future of Medicaid and healthcare policy, and the uneasy emergence of consumers as the third-largest payer of healthcare services.

Acknowledging the need to bridge the patient finance gap, more and more healthcare systems and physician practices are vetting patient finance and engagement partners. Finding patient finance partners that can help navigate the two most highly-regulated industries in America---healthcare and financial services---is a significant task. One criteria that should actually be front and center is the compliance function.

It’s not easy for providers to know how to evaluate vendors from a compliance and regulatory perspective. Since there is no abdicating compliance risk, the best approach is to find service providers who are capable of helping shoulder the load, and who are equally committed to helping patients get and keep access to the care they need, when they need it.

Revenue cycle leaders need to keep patients engaged, improve financial performance and simultaneously comply with a litany of laws and regulations. Where should one focus during the patient finance vendor RFP process?

Fluency in compliance

Providers may not realize that if they’re offering payment plans greater in term length than four months, the Consumer Financial Protection Bureau (CFPB) considers it a loan, even if the interest rate is 0%. The consumer protections governing these loans are robust, thanks in part to the hangover from the subprime lending fiasco, which caused regulators to paint all lenders with broad strokes. Vendors need to know the issues and how they apply to the revenue cycle. They should be expert in an exhaustive list of rules including (but not limited to) those set forth by the CFPB, the Truth in Lending Act, Gramm-Leach-Bliley Act, and a host of other protections, of course including HIPAA.

Charter check

Many healthcare providers don’t realize that the charters governing a finance vendor’s banking partners matter. Those vendors operating under a federal charter are governed by a higher standard than those operating under state charters. Not all state charters are as stringent, and a banking partner relationship does not necessarily mean rigorous risk management protocols are in place. Compare the protections of federal vs. state banking charters and consider the risk exposure of not engaging a vendor partnered with a bank operating under a federal charter.

Right-size investment in compliance oversight

What does a compliance-centered culture look like? Look for partners who:

    • have helped their clients develop a clear and updated credit policy---which is mandatory. Ask to see examples.
    • conduct non-discrimination testing and have a training protocol to make sure the guardrails are part of your standard front- and back-office operating procedure.
    • subject every single piece of marketing material (that a consumer would receive) about finance options to a rigorous compliance and regulatory overview before it’s used. Ask to see the criteria for the review process.


  • can operationalize compliance with a thick alphabet soup including, but not limited to: the CFPB, the Patriot Act, the FCRA, the Military Lending Act, the Service Member’s Civil Relief Act, spam regulations, and the list goes on. Ask prospective vendors: What specific laws and regulations are you screening for and how do you do it? The list should be long.

Relationship matters

Few would argue that offering patient finance options is supposed to bridge not just the affordability gap, but also the relationship gap between patient and provider. Since a great clinical experience can be ruined by the financial hangover, it’s especially important to engage vendors who keep the patient-provider relationship at the center of the patient experience. Beware the vendors who send, for example, statements with their own logos or their banking partner logos on their invoices, instead of the healthcare provider’s. It’s the patient-provider relationship that should stay in first place, assuage any worries and make the consumer feel valued and cared for. Look for vendors who will keep their provider clients’ brand identity and brand promise front and center.

Focus on patient engagement

If your patient finance partner is taking the right approach, they’re not calling patients to address an unpaid bill or a specific encounter. Instead, they call to keep patients feeling valued and cared for. They’re calling to talk about empowering patients to get care when they need it on an ongoing basis, and to offer a way to manage that ongoing empowerment with a revolving line of credit or another financial service. This is not volume work; this is quality work.

Bottom Line

As the self-pay crisis reaches the tipping point, there will be even more vendors in this space offering patient financing without the proper compliance and regulatory underpinnings. Conscientious partners will have protocols in place to ensure that consumers are treated fairly and providers aren’t overburdened by risk. Make sure you take the time to vet and engage a vendor who has ALL the appropriate compliance and regulatory mechanisms in place to protect consumers and providers alike.


Thanks goes to the executive leadership and compliance teams at CarePayment for their subject matter expertise on this article.

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