On Oct. 1, CFPB issued opinion on medical debt collection practices.
CFPB issued an advisory opinion on the deceptive and unfair collection of medical debt.
Clarified that collectors, which may include third-party revenue cycle management firms, violate federal law when they collect on inaccurate/legally invalid medical debts.
On the same day, published a consumer advisory with practical information about the steps consumers can take if they have received collection notices for medical bills.
Follows White House fact sheet on actions medical debt collection practices, #228099.
Medical Debt Collection
Reminded debt collectors of obligation to comply with Fair debt collection practices act (15 USC 1692), Reg F's prohibitions on deceptive representations in debt collection.
Opinion details how companies violate federal law when they collect or attempt to collect on medical bills that are inaccurate, unsubstantiated, or invalid under the law.
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.
This can coerce consumers into paying twice for same service, causing financial harm.
Further, 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.
Debt collectors must not collect on bills that include upcoded or exaggerated services, or charges for services the consumer did not receive; this inflates medical debts.
Collectors must not attempt to collect medical debts unless they are substantiated, which may include having documentation of payments or financial assistance eligibility.
Additionally, companies are prohibited from misrepresenting to consumers that the amount being collected is fully settled when the payment obligation may be uncertain.
CFPB will take action against debt collectors that violate the rights of patients.
Effectiveness
Advisory opinion is applicable 60 days after publication in the federal register.
Oct. 2024 CFPB Fed Reg Publication
On Oct. 4, 2024, CFPB published advisory in federal register; applicable Dec. 3, 2024.
Nov. 2024 CFPB Effective Date Revision
On Nov. 29, 2024, CFPB published revision to date of applicability for advisory opinion.
To allow sufficient time to brief issues raised in pending litigation in the U.S. District Court for DC, CFPB is revising the applicable date of advisory opinion to Jan. 2, 2025.
