WASHINGTON, D.C. —The Consumer Financial Protection Bureau (CFPB) has released a guidance aimed at curbing unlawful medical debt collection activities. This guidance specifically targets practices by debt collectors, including third-party “revenue cycle management” companies, which have been found to violate federal law by pursuing inaccurate or invalid medical debts.
CFPB Director Rohit Chopra highlighted the prevalence of inaccuracies in medical billing, stating, “Medical billing is often riddled with errors, including inflated or duplicative charges, fees for services the patient never received, or charges already paid.” The new guidance from the CFPB seeks to ensure that consumers are not unfairly pursued by debt collectors over such unsubstantiated bills.
The advisory opinion outlines several illegal collection practices. These include double billing, where collectors pursue payments for services already covered by insurance or paid by the consumer; and exceeding legal limits, where amounts collected surpass federal or state caps, as outlined by the No Surprises Act. Collecting on falsified charges, such as upcoded services or non-received treatments, also constitutes a violation. Furthermore, debt collectors are prohibited from pursuing unsubstantiated medical bills without proper documentation or from misrepresenting a consumer’s right to contest the charges.
The impact of these unlawful practices is profound, with about 100 million Americans burdened by over $220 billion in medical debt. The CFPB has reported numerous complaints from individuals facing collections for debts either already settled or inaccurately billed, underscoring the urgent need for regulatory intervention.
The CFPB’s action comes amid growing concerns over outsourced billing and collection practices in the healthcare sector, where hospitals increasingly rely on third-party firms. These entities must adhere to the Fair Debt Collection Practices Act, ensuring fair and transparent dealings with consumers.
By addressing these predatory practices, the CFPB aims to alleviate undue financial stress on consumers and prevent inflated healthcare costs. The guidance is part of broader efforts by the bureau, including a proposed rule to exclude medical debts from credit reports, reinforcing the commitment to safeguarding consumer rights.
This initiative by the CFPB reflects a significant step towards fairer medical billing practices and underscores the importance of ensuring that consumers are not victimized by erroneous or exploitative debt collection activities. As the CFPB and other enforcement agencies continue to monitor compliance, this guidance promises to bring much-needed relief to countless American families navigating the complexities of medical debt.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.