Welcome to the Research Assistant Weekly Newsletter - a subscriber-only resource for insight into emerging compliance challenges, details on peer calls, and links to new Research Assistant reports, documents, tools, and more.
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This week we discussed the continued attack on medical credit reporting and its impact on medical debt collection operations. Last month, the CFPB announced its plan to draft proposed rules eliminating credit reporting on medical debt. This month, Congress acted by introducing S. 3103 and H.R. 6003 Medical Debt Relief Act to codify this into law.
This has been a point of contentious discussion for the last 2 years on the heels of the COVID pandemic and will have huge implications for the healthcare market and the debt collectors that serve this market.
The implications span from healthcare providers only accepting payments up front, to closing healthcare facilities in rural areas. If healthcare providers begin only accepting payments up front there will be little to no work for debt collectors. Medical debt collectors should consider diversifying their operations into other asset classes to ensure this disruption does not financially cripple their organization. Additionally, medical debt collection should use this opportunity to further solidify their relationship with the clients to build a coalition to lobby against these bills from the consumer harm perspective.
What are some of the potential areas for consumer harm?
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Upfront payments can be harmful particularly if overpayments are made prior to insurance being applied. How will a consumer know if they are due a refund, and how long will that take? One of our members shared a personal story about being required to pay two deductibles in advance prior to having a medical procedure. How many Americans, who are often on high-deductible plans, can reasonably afford to pay their deductible in advance? This is likely to increase consumer credit card debt as well.
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Healthcare in the United States will significantly decline if rural doctors or privately owned physician offices close as a result of these laws.
For agencies that are concerned about this direction, we encourage you to get involved with industry associations and groups that can work directly with lawmakers and state legislators to mitigate the impact of these bills.
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