Thanks to Consumer Financial Protection Bureau (CFPB), consumers availing of emergency medical services will get more protection from debt collection and credit bureaus.
Last week, the CFPB released a bulletin related to the No Surprises Act. This step was taken to create awareness among debt collection agents and credit bureaus about their legal obligations toward the prevention of unlawful debt collection and credit score reporting. The No Surprise Act (NSA) prevents consumers from certain surprises that may arise from unexpected medical bills.
Top Fintech Interviews:
Global Fintech Interview with Todd Bonner, Co-Chairman at NextPlay Technologies
CFPB Drafts in Powerful Consumer Protection Framework
CFPB has issued the new bulletin which is likely to act as a strong deterrent against illegal debt collection and credit reporting. NSA prohibits companies that make an attempt to collect repayments on medical bills. NSA also hammers down on the unlawful practice of reporting unlawful debts to credit bureaus, thereby safeguarding the consumers from any surprises that arise due to unpaid medical bills.
Latest Fintech News: Stout Ranks As a Top Fairness Opinion Provider in 2021
Companies that abuse the NSA guidelines may also face legal actions under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). Back in December 2020, The Consolidated Appropriations Act of 2021 was enacted to protect consumers from surprise bills, including the No Surprises Act under title I and Transparency under title II.
Under the NSA guidelines, the CFPB has been empowered to investigate every medical claim availed by the consumers. If found guilty of forceful debt collection for exceeding medical bills, or found to be sharing patient data with credit bureaus, CFPB will take appropriate legal action against the companies, under the No Surprises Act.
What are the types of medical services covered under NSA?
Effective January 1, 2022, all consumers who are getting emergency care, non-emergency care from out-of-network providers at in-network facilities will receive protection on their medical bills payments. The benefits are also available for patients availing of air ambulance services from out-of-network providers.
The purpose of bringing in new rules is to enhance the scope of emergency services irrespective of authorization and medical coverage linked with consumers’ financial health or stability. These rules could prevent out-of-pocket expenses, also referred to as surprise medical billings. Such expenses often force consumers into debt, causing unnecessary anxiety during their medical care.
Top Crypto Update:
Binance Becomes the Blockchain and Cryptocurrency Industry’s First to Join the NCFTA
According to the online advisory issued recently, the CFPB bulletin “advises credit bureaus that the accuracy and dispute obligations imposed by the FCRA apply with respect to debts stemming from charges that exceed the amount permitted by the No Surprises Act.”
CFPB Director Rohit Chopra said, “Too many Americans have been shocked by surprise medical bills and forced to pay up through credit report coercion. Our action today should serve as a reminder not to collect on or furnish credit reporting information about invalid medical debt.”
Future of Medical Care Repayment in the era of No Surprises Act
The NSA is seen as the most critical consumer protection law since the Affordable Care Act. The COVID-19 pandemic has forced many consumers into debt due to surprise medical bills. Debt collectors are flexing muscle on the consumers despite the financial stability conditions of the abused individuals and families.
Last year, the Federal Reserve Board reported that 17% of adults had major, unexpected medical expenses in the prior 12 months with the median amount between $1,000 and $1,999, and 23 percent of adults went without medical care due to an inability to pay. In 2014, the CFPB published a report showing that 43 million Americans had overdue medical debt on their credit reports, and more than half of all overdue debt on credit reports is from medical debt.
According to Health and Human Services (HHS) Secretary Xavier Becerra, “After years of (a) bipartisan effort, we are finally providing hardworking Americans with the federal guardrails needed to shield them from surprise medical bills. We are taking patients out of the middle of the food fight between insurers and providers and ensuring they aren’t met with eye-popping, bankruptcy-inducing medical bills. This is the right thing to do, and it supports President Biden’s vision of creating a more transparent, competitive and fair health care system.”
What CFPB Said in the Bulletin
- Debt collectors are prohibited from misrepresenting the character, amount, or legal status of any debt, as per the existing consumer financial protection law.
- Consumers have immunity against misrepresented medical billing or debt that is or could be arising from ‘surprise expenses’ during medical care.
- Debt collectors require explicit authorization by law to collect or make any attempt to collect the debt from consumers. They can’t use any unfair or unconscionable means to collect or attempt to collect any debt.
- If found to be collecting an amount that exceeds what is owed would violate the prohibition on unfair or unconscionable debt collection practices, companies can face harsh action as per laws.
- The onus to furnish accurate details related to unpaid medical billing lies with debt collectors who work in sync with credit bureaus. No company can share personal information about a patient’s medical billing without addressing written policies and following procedures related to ensuring “accuracy and integrity of consumer information provided to credit bureaus.”
- Credit bureaus that create consumer credit reports must assure the report and the information contained in the report are accurate.
- Both credit bureaus and furnishers must conduct reasonable and timely investigations of consumer disputes to verify the accuracy of consumer information.
- Any dispute arising from false or inaccurate debt and credit reporting would be dealt with as per federal consumer financial protection law, as applied with respect to debts stemming from charges that exceed the amount permitted by the NSA.
In 2022, consumers can definitely feel protected from debt collection companies and credit bureaus, thanks to CFPB’s continued guidance. In 2022, the CFPB will continue to work with the U.S. Department of Health and Human Services and other partners to address medical debt abuses.
Source: CFPB/ NSA
[To share your insights with us, please write to sghosh@martechseries.com]
