Multiple government agencies are scrutinizing medical payment products. On July 7, 2023, the Consumer Financial Protection Bureau (CFPB), U.S. Department of Health and Human Services (HHS), and U.S. Department of Treasury issued a request for information (RFI) into high-cost specialty financial products, such as medical credit cards and installment loans. The government is concerned that these products are pushed on patients as a way to pay for routine medical care and that they drive up healthcare costs and medical debt. The RFI is open for public comment until September 11, 2023.
The agencies generally seek data and comments on the following topics:
- The scope, prevalence, terms, and impacts of medical payments products
- The risks and benefits of medical payment products for consumers
- The impact of medical payment products on the healthcare system
- The potential for discrimination in the marketing and sale of medical payment products
- The effectiveness of consumer protection laws and regulations in protecting consumers from harm related to medical payment products
Specific Requests for Information
In the RFI, the CFPB, HHS, and Treasury seek data and comments on the following areas:
- The scope, prevalence, terms, and impacts of medical payment products, including medical credit cards and loans
- Downstream consequences of these products and in potential actions to address any harms caused by these products
- Data and comments on the interest and fee costs of these products (including both interest rates and total accrued interest), the application and approval process for these products, and trends of medical payment product use
- Total outstanding consumer debt on medical credit cards, medical installment loans, and other medical payment products
- Data regarding the characteristics and demographics of medical payment products users is also welcome, such as whether users are insured or uninsured, whether certain populations or income groups are more likely to use these products, and whether use is concentrated in certain geographical areas or for patients seeking particular kinds of care
- Level of concentration in the medical payment product market, the ownership of medical payment product companies (including ownership by healthcare providers, health insurance issuers, or private equity firms), and the implications of these factors for competition and consumer choice. To that end, the agencies seek specific information on the types of financial entities that offer medical credit cards and loans.
- The extent to which medical credit cards and loans may hamper financial assistance and access to benefits, and any options for regulators to reduce such barriers. The agencies also seek to understand the extent to which healthcare providers, including tax-exempt hospitals, screen patients for public or private insurance eligibility, financial assistance eligibility, or other benefits before offering them medical credit cards or loans.
- How frequently patients discover billing errors after signing up for a medical payment product, the main sources of billing errors, and how paying medical bills via a medical payment product affects patients' ability to dispute those bills. The agencies seek comment on ways to ensure that patients retain their rights to challenge inaccurate bills regardless of payment method.
- Incentives offered by financial companies to healthcare providers for their promotion of medical payment products, including revenue-sharing and other incentives
- Training or other support that medical payment product companies offer to providers
- Incentives or support might implicate the federal anti-kickback statute or other laws or regulations
- How plans and issuers' billing and reimbursement practices affect healthcare providers' decisions to offer and promote medical payment products
- Prices or versions of standard charges offered to patients who use these products, and whether these charges are adequately disclosed in accordance with hospital price transparency requirements and No Surprises Act good-faith estimate requirements
- Whether medical payment product companies are operating outside of protections against credit reporting of medical collections items and against extraordinary collection actions by tax-exempt hospitals
- How notice and consent requirements for post-stabilization and nonemergency healthcare items or services under the No Surprises Act intersect with providers' promotion of medical credit cards and loans to out-of-network patients
CFPB Specific Requests
The CFPB generally seeks to better understand consumer financial issues raised by medical payment products, including the credit practices of medical payment product companies as well as the debt collection and credit reporting practices utilized by both healthcare providers and medical payment product companies.
The CFPB also asks the following questions:
- What actions should the CFPB consider taking to address problematic practices related to medical credit cards or loans, including debt collection and credit reporting practices?
- How do firms offering medical financial products typically market to providers?
- How do creditors and their affiliates underwrite loans to patients? What specific factors (e.g., age, type of medical procedure, credit score, etc.) are considered in underwriting?
- Do consumers understand the risks of paying medical bills via a medical credit card, installment loan, or other commercial payment product, including lowered ability to negotiate their bill with their provider?
- To what extent are alleged debts placed on medical credit cards and loans sent to debt collectors? How do medical payment product companies' debt collection practices differ from those of healthcare providers, and are any issuer or provider debt collection practices posing risks to consumers?
- How can the CFPB use its authorities to ensure people with medical bills in collections, including medical payment product debt, are screened for eligibility for financial assistance and other benefits?
- How are healthcare providers and financial companies using credit or "propensity to pay" scores to determine patients' eligibility for financial assistance or medical payment products? What are the implications for compliance with the Fair Credit Reporting Act or other CFPB authorities?
- When hospitals write off a patient's debt as uncollectible or "bad debt" and cease attempts to collect, do they notify patients that collection attempts will cease? Would patients benefit from such notifications, and would such notifications reduce hospital revenue?
The CFPB will use the information gathered from the RFI to inform its work on consumer protection in the healthcare market.
In addition to the RFI, the CFPB has also issued a consumer alert on medical payment products. The alert warns consumers about the risks of these products, such as high fees and limited coverage. The alert also provides tips for consumers who are considering purchasing a medical payment product.
The CFPB's focus on medical payment products is part of its broader effort to protect consumers in the healthcare market. The CFPB has issued a number of consumer alerts and enforcement actions related to healthcare, including a recent action against a company that allegedly engaged in illegal medical debt collection and credit reporting practices. The CFPB also has taken action against a company for alleged deceptive credit card enrollment tactics at doctors' and dentists' offices around the country.
The CFPB's work on medical payment products is notable because these products can have a significant impact on consumers' financial well-being. By gathering information from consumers and stakeholders, the CFPB hopes to better understand the risks and benefits of these products and take steps to protect consumers from harm.
- CFPB Report: Medical Credit Cards and Financing Plans
- CFPB Report: Medical Billing and Collections Among Older Americans
- CFPB Report: Medical Debt Burden in the United States
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