By Randy Hutchinson
President of the BBB of the Mid-South
Reprinted from The Commercial Appeal
The Consumer Financial Protection Bureau (CFPB) is on a mission to protect consumers from illegal medical debt collection practices. It issued advisories in October identifying illegal practices and offering advice to consumers to ensure they don’t pay a medical debt they don’t owe.
Roughly 100 million Americans owe more than $220 billion in medical debts that many find confusing and inaccurate. People have complained to the CFPB about collection notices for debts they don’t owe, that they or their insurance company already paid, or that should have been covered by insurance, government programs or hospital financial assistance.
Many healthcare providers outsource collection of medical bills to third-party debt collectors or “revenue cycle management” firms. The CFPB cites these ways some collectors violate the Fair Debt Collection Practices Act:
- 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. This practice can coerce consumers into paying twice for the same service, causing significant financial harm.
- 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. These violations can saddle consumers with unjustifiably high medical debts, burdening their finances and deterring them from seeking future care.
- 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. This deceptive practice can drastically inflate consumers’ medical debts, potentially leading to long-term financial distress or even bankruptcy.
- 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. Collecting unsubstantiated bills can result in consumers being harassed for debts they do not owe or for which they qualify for financial assistance.
- 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.
The CFPB reminds consumers that they have rights and protections when dealing with debt collectors. If you’re not sure you owe a bill, request a detailed list of charges from your healthcare provider or the debt collector. Look for charges that can’t legally be collected, such as costs for a healthcare service you never received; charges for a service that’s more expensive than the one you received; or bills that were already paid by you or by your insurance or handled through financial assistance or charity care programs.
Laws in many states say that debt collectors can’t sue you to collect debts that are several years old. An attorney can advise you about the laws and time limitations in your state.
You may be able to negotiate the amount you owe. A debt collector might not tell you that, so contact the healthcare provider directly.
Debt collectors must comply with federal law, including not making harassing or abusive calls. You can submit a complaint about a problem with a debt collector at consumerfinance.gov/complaint or by calling (855) 411-CFPB (2372).