Senate Democrats are calling on federal authorities to take action on aggressive medical debt collection, citing reports about hospitals suing patients over unpaid bills.
In a letter to the the Consumer Financial Protection Bureau (CFPB), Democratic Sens. Chris Murphy (Conn.) and Chris Van Hollen (Md.) recommended a series of actions to protect consumers' credit scores, provide patients with more information about financial assistance and coverage options, and give them more time to dispute or resolve debts before they are sent to collections.
"The COVID-19 pandemic highlighted the many cracks that remain in our healthcare system into which people fall, sometimes plummet, regarding debt incurred for their healthcare," the senators wrote to Dave Uejio, acting director of the CFPB, on Friday
"Nationally, we hear heartbreaking stories of patients who have lost their homes, had their wages or state tax refunds garnished, or faced arrests over an unpaid medical bill, in some instances amounting to as little as $28," they wrote.
The CFPB should prohibit healthcare providers from reporting patients' medical debt to credit agencies, or at least require a one-year reporting grace period so patients have time to resolve billing disputes or apply for financial assistance, Murphy and Van Hollen wrote.
In the second quarter of 2018, medical bills comprised more than half of third-party debt collections , the senators wrote. "We urge your agency to revisit this issue of medical debt, as being reported for delinquency can have long-lasting implications for a person's economic security, such as the ability to obtain loans for housing and cars," they wrote.
Murphy and Van Hollen also want the CFPB to protect patients from aggressive actions by debt collectors. Among their proposals are: limiting the number of calls placed to consumers; banning bill collection or credit reporting while patients are appealing insurance coverage denials, disputing bills or applying for financial assistance; and requiring them to inform patients about charity care programs and potential coverage options.
CFPB also should issue a report on hospitals and debt collectors that use tactics like lawsuits, wage garnishments and liens, and to incorporate information about the hospitals' revenue into its findings.
Although there is no full accounting of how many hospitals sue patients for unpaid bills, these practices at several major health systems have received scrutiny from the media and policymakers in recent years.
The University of Virginia Health System, for example, recently announced it would cancel lawsuits against thousands of patients after receiving negative press attention for its debt-collection practices, including taking people to court, garnishing wages and putiting liens on homes.