“The Consumer Financial Protection Bureau (CFPB) has been strongly hinting, if not outright announcing, that the medical/healthcare market is one of its primary concerns when looking at its regulation of the debt collection industry.” InsideARM April 7, 2015. For today’s blog, we asked NL attorney member Mitchell L. Wong to comment on the future of medical collections. He chose to focus on compliance and how collecting medical debt is and will continue to be influenced by the scrutiny of the CFPB.
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The mantra of collections today is “compliance, compliance, compliance.” In light of this, the Consumer Financial Protection Bureau (CFPB) is particularly concerned with Medical Debt Collection. They even issued a report in December 2014 regarding medical collections. Specifically, they reported that 52.1 percent of all collection tradelines (credit accounts that are reported to the credit reporting agencies) were medical. They expressed particular concern over the fact that medical debt is often incurred from an unpredictable event, or it may even be the result of insurers arguing with medical providers about the bill. Of great interest to the CFPB was the fact that most of the medical debt was fairly small.
The CFPB found that one in five American’s credit reports contain overdue medical debt. Of the approximately 43 million Americans with medical debt on their credit bureau report (CBR), 15 million have only medical debt.
The reporting of medical debt to credit bureau reporting agencies is an area of concern for the CFPB. It has requested that the agencies identify, investigate and take action against Furnishers with the most overall disputes. The CPFB also requires that credit reporting agencies rank Furnishers with particularly high disputes relative to their industry peers. Furthermore, the CPFB has criticized credit reporting Furnishers that “park” medical debts on credit reports without reaching out to resolve issues or disputes with those patients.
It is imperative for effective, compliant collections that we dispel the confusion surrounding medical debt. A legible and understandable bill, along with an explanation of credits, especially if the credits are payments from an insurer, would be an excellent starting place. Patients who can understand what they are being asked to pay for are usually far more willing to work with us to repay what they owe.
Gordon & Wong Law Group works diligently to create a culture of compliance, along with implementing best practices to insure effective collections. When collecting medical debt, we reach out to contact the debtors in an effort to discover whether they are insured, underinsured or uninsured; to identify which insurer should have been billed; and to evaluate individuals to see if they qualify for the “public price” for health care services, or if they are eligible for hospital charity care in accordance with California’s Health and Safety Code. With increasing scrutiny from the CPFB and the many pitfalls of collecting in your state, compliantly collecting medical debt is and will continue to be an imperative.
Mitchell L. Wong, Gordon & Wong Law Group, P.C.
1485 Treat Boulevard, #102, Walnut Creek, CA 94597