SAN ANTONIO – Medical debt is a growing issue in the US, with many patients stuck paying bills they may not owe. The Consumer Financial Protection Bureau (CFPB) has taken steps to address these concerns and provide protections for patients facing unfair debt collection practices.
The CFPB receives thousands of complaints annually about medical debt collection, many involving charges that should not have been billed.
Some debts were paid off, covered by insurance, or should have been classified as charity care. However, patients are still being pursued by debt collectors.
“Many of these complaints are coming from people who don’t actually owe the debt, whether it was paid by insurance, by the patients themselves, or whether it should have been paid by financial assistance,” said Julie Margetta Morgan, associate director of Research, Monitoring and Regulation for the CFPB.
Nonprofit hospitals, which are legally required to offer charity care to low-income patients, are not always providing that assistance, leaving some patients with bills they cannot afford.
To counter these issues, the CFPB has proposed new rules that would ban credit reporting for medical debts. Debt collectors often use this tactic to pressure patients into paying, even if they do not owe the money.
“We’ve already seen some action by the national credit reporting agencies to start to take larger debts off of people’s credit reports. And that’s having a positive impact for people. But our research suggests that we need to go further,” Morgan added.
Another problem patients face is the use of medical credit cards, often marketed as a solution for paying bills with zero-interest promotions. However, many patients cannot pay off their balances before high interest rates begin, leading to more debt.
“In many cases, there’s virtually no way for a person to actually pay off what they owe during that zero-interest period. And once that period ends, they end up paying much, much higher interest on their medical bills,” Morgan said.
The CFPB aims to give patients more time to dispute these debts and reduce the leverage collectors use, such as threats to report unpaid debts to credit agencies.
“We’re removing the kind of coercive pressure that debt collectors can put on people by threatening to report an unpaid debt to a credit reporting agency. That’ll give people a little bit more time,” Morgan said.
The bureau continues to work with other government agencies to pressure nonprofit hospitals to follow charity care requirements and provide assistance to patients before their bills go to collections.
Patients are encouraged to inquire about charity care options before agreeing to any payment plans or medical credit cards. Checking bills for accuracy and disputing charges when necessary are also important steps.
KSAT asked on Facebook if any viewers were dealing with this type of issue.
Jo Ann Rodriguez, said, “Recently had to get surgery, uninsured. Over $20,000. They expect all debt to be paid off in one year. Unbelievable especially if you are a single income of 30k per year and have rent, utilities to pay. This is why I can’t afford insurance to start with.”
Suri Ph, said, “I paid the bills for my daughter and me. All were done, but months later they sent me bills and asked me paying more. One it was years ago. And my daughter’s bill also. My son got injured during practice at school. Coaches called the ambulance to transfer him to Dell Children’s hospital in CP. Later I got big bills. Didn’t cover the ambulance fee and many more. We are still on payment.”
For more information on disputing medical debt or submitting complaints to the CFPB, visit consumerfinance.gov.