The Consumer Financial Protection Bureau (CFPB) on Tuesday issued a consumer advisory to combat families being targeted by “illegal medical debt collection tactics.”
The CFPB’s cited tactics violating federal law that debt collectors have employed when it comes to medical bills, including double billing for services covered by insurance; collecting amounts that exceed federal or state caps; falsifying or exaggerating charges; collecting on unsubstantiated bills; and misrepresenting payment obligations and consumers’ ability to contest bills.
“Medical billing is often riddled with errors, including inflated or duplicative charges, fees for services the patient never received, or charges already paid,” CFPB Director Rohit Chopra said in statement.
Medical debt is one of the most common forms of debt represented on credit reports. The Biden administration earlier this year moved to ban medical debt from being included on credit reports.
Medical debt advocacy groups like Undue Medical Debt praised this rule, noting that unlike other forms of debt, medical debt is not a good indicator of someone’s credit worthiness. While student loan debt or car loans are incurred knowingly with predetermination, people can’t predict when or how sick they will be in the future.
The CFPB’s guidance advised that people receiving calls from debt collectors for medical bills should request a detailed list of charges sometimes called a “superbill,” negotiate the amount owed, submit a complaint with the CFPB if a debt collector is engaging in federally illegal tactics and sue collectors if these laws are being violated.
“Hospitals and other healthcare providers in the United States are increasingly outsourcing medical billing and collection activities to third parties, such as ‘revenue cycle management’ firms, who may have legal obligations under the Fair Debt Collection Practices Act,” the CFPB’s advisory stated.