Outrageous medical bills may have met their match. Just two years ago, the problem had spun out of control, leaving consumers with just a handful of options, but on Wednesday, the Consumer Financial Protection Bureau (CFPB) issued guidance to prevent families from being targeted by illegal and unfair medical debt collection tactics.
Debt collectors, including third-party revenue cycle management companies, were violating federal law when they collected inaccurate or legally invalid medical debts, according to the advisory opinion.
These illegal practices included double-dipping to get paid for services already covered by insurance, dogging consumers to pay fake or exaggerated charges, misrepresenting consumers' rights to contest bills, and collecting on debts without documentation that the amount owed is actually owed.
If the agency can make it stick, consumers will be protected from anyone who tries to bully them into inflated healthcare costs.
“Medical debt in this country is out of control, something unheard of in any comparably wealthy country,” Public Citizen co-president Lisa Gilbert told ConsumerAffairs in an email.
“To bring peace of mind to many American patients, more must be done. There is far too much greed in our broken healthcare system that continues to hinder patients’ access to care. We must end the profit motive in healthcare and finally ensure every American can receive care when they need it without facing financial ruin.”
This was a bigger problem than you might think, too. Nearly 100 million Americans owe over $220 billion in medical debt, and not knowing who to talk to or what to do, they frequently freeze in their tracks, do nothing, and leave an opening for collection notices for debts they do not owe to overflow their mailboxes.
The CFPB says that many of those notices were already paid for by the consumer or insurance, or that should have been covered by insurance, government programs, or hospital financial assistance.
Hospitals were (and still are) hiring other companies to do their billing, but that hasn’t proved to be a consumer plus, either, because those companies might make mistakes on bills or use unfair ways to collect money.
The new mantra
This advisory opinion outlines how these companies violate federal law when they collect or attempt to collect on medical bills that are inaccurate, unsubstantiated, or invalid. According to the guidance, illegal practices include:
Double billing: Companies cannot attempt to collect on medical bills that have already been paid by the consumer, insurance, or a government program such as Medicare or Medicaid.
Exceeding legal limits: Companies must not attempt to collect amounts that surpass federal or state caps, such as those set by the federal No Surprises Act or state laws on “reasonable” rates.
Falsified or fake charges: Debt collectors must not collect on bills that include “upcoded” or exaggerated services, or charges for services the consumer did not receive.
Collecting unsubstantiated medical bills: Debt collectors must not attempt to collect medical debts unless they are substantiated, which may include having documentation of payments or financial assistance eligibility.
Misrepresenting consumers’ rights to contest bills: Companies must not misrepresent to consumers that the amount being collected is fully settled, when the payment obligation may be uncertain. Misrepresenting the status of the amount may pressure consumers into paying disputed or negotiable debts.
If any of this happens to you, the CFPB can help. Not only does it provide practical information on dealing with medical bill collection notices, but it also takes calls from any consumer who wants to submit complaints about this or any other financial product or services. To do that, visit the CFPB’s website or call (855) 411-CFPB (2372).