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July 12 -- The Consumer Financial Protection Bureau (CFPB), Centers for Medicare & Medicaid Services, Department of Health and Human Services (HHS), and Department of the Treasury (Treasury) (collectively, the agencies), solicit comments from the public and interested parties on medical credit cards, loans, and other financial products used to pay for health care. The agencies seek to understand the prevalence, nature, and impact of these products, including disparities across different demographic groups. The agencies also seek to understand the effects these products may have on patients and on the health care system. In particular, the agencies seek comment on whether these products may allow health care providers to operate outside of a broad range of patient and consumer protections. The agencies also seek comment on whether these products may contribute to health care cost inflation, displace hospitals' provision of financial assistance, lead patients to pay inaccurate or inflated medical bills, increase the amount patients must pay due to financing costs, or otherwise harm patients' mental, physical, and financial well-being, including through downstream credit reporting and debt collection practices. In line with the agencies' work to lower health care costs and reduce the burden of medical debt, the agencies also seek comment on policy options to protect consumers from harm. To be assured consideration, comments must be received by September 11, 2023.

Many people have difficulty paying for medical care. Although insurance coverage has expanded over the last two decades and the uninsured rate has recently reached historic lows, the cost of medical care, and particularly the out-of-pocket cost for patients and families, has grown faster than inflation. For many patients, the financial challenges associated with paying for medical care are compounded by the complexities of health care coverage determinations as well as by medical billing and payment systems that can result in inaccuracies and errors that only increase the financial and psychological burden on patients.

Although patients have many options to pay for care, health care providers may encourage patients and their families to use commercial medical payment products, including medical credit cards and installment loans, to finance care. Health care providers may promote medical payment products because the use of these products allows providers to avoid the administrative burden of slow and complex insurance reimbursement, outsource servicing and collections costs, get paid faster, and receive payment from people who otherwise would not pay the full price for care. However, for patients, using these products can complicate insurance coverage, interfere with the availability of financial assistance, make it difficult to dispute inaccurate or inflated medical bills, and increase the total cost of care through interest and fees. It is also possible that some people who pay for care using medical payment products are charged higher prices for their care than they otherwise would have been asked to pay, such as gross charges (also known as chargemaster prices).

Patients may use risky and expensive commercial medical payment products rather than low- or no-cost alternatives because they do not know alternatives exist, they do not understand the risks and costs of medical payment products, or they feel pressured or coerced into signing up for these products. In some cases, medical payment products may allow patients to access care they would otherwise have to forgo. However, these payment products can also lead to patients paying more out of pocket if patients use medical payment products to pay bills that should have been covered by insurance or financial assistance, to pay inaccurate bills which they then have difficulty disputing post-payment, or to pay bills in full whose balances they would otherwise have been able to negotiate pre-payment.

Health care providers and financial companies may also use these payment products to attempt to avoid restrictions on credit reporting and debt collection practices that otherwise apply to medical debt, including restrictions imposed by national credit reporting companies and restrictions imposed by Federal law. Specifically, the three national credit reporting companies voluntarily do not report medical debt collections items with original balances under $500 or which are less than one year old, but they have not restricted the reporting of debt collections items reported with classification codes indicating that they are “credit card” or “installment loan” collections. Additionally, section 501(r) of the Internal Revenue Code (IRC) prohibits tax-exempt hospital organizations from engaging in extraordinary collection actions, including reporting the patient's debt to credit reporting companies or sending the patient's debt to a third-party debt collector, before the organization has made reasonable efforts to determine whether the individual is eligible for assistance under the hospital's financial assistance policy. However, the agencies believe that tax-exempt hospitals and the financial companies that partner with them may not be making reasonable efforts to determine whether an individual is eligible for financial assistance before offering the individual a medical payment product or taking extraordinary collection actions to attempt to collect an overdue medical payment product balance.

In this Request for Information (RFI), CFPB, HHS, and Treasury seek comment on the prevalence, nature, and impact of medical payment products on consumers and on the health care system. The agencies also seek comment on policy options to address practices by health care providers, health insurance issuers, employer-sponsored health plans, and financial companies that result in consumers paying excess costs.

This RFI builds upon recent work by CFPB, HHS, Treasury, and other Federal agencies to assist consumers with managing health care costs and medical bills, and to protect patients and consumers from paying inaccurate or inflated medical bills. That work includes CFPB research into the extent and impact of medical debt and the accuracy of those debts, as well as CFPB guidance to prevent unlawful medical debt collection and reporting. It also includes actions by HHS and other agencies to implement surprise billing protections, enforce price transparency measures, lower health care costs, and increase access to affordable, quality health care. Additionally, it includes policy development by Treasury on surprise billing protections and on requirements that specifically apply to tax-exempt hospitals, including those relating to billing and collection, financial assistance policies, and community benefits. . . .

In this RFI, the CFPB, HHS, and Treasury seek data and comments on the scope, prevalence, terms, and impacts of medical payment products, including medical credit cards and loans. The agencies are also interested in the downstream consequences of these products and in potential actions to address any harms caused by these products.

To better understand the medical payment product market, the agencies seek data and comments on the interest and fee costs of these products (including both interest rates and total accrued interest), the application and approval process for these products, and trends of medical payment product use. The agencies also seek information as to the total outstanding consumer debt on medical credit cards, medical installment loans, and other medical payment products. Data regarding the characteristics and demographics of medical payment products users is also welcome, such as whether users are insured or uninsured, whether certain populations or income groups are more likely to use these products, and whether use is concentrated in certain geographies or for patients seeking particular kinds of care. The agencies also seek to better understand the level of concentration in the medical payment product market, the ownership of medical payment product companies (including ownership by health care providers, health insurance issuers, or private equity firms), and the implications of these factors for competition and consumer choice. To that end, the agencies seek specific information on the types of financial entities that offer medical credit cards and loans.

The agencies seek to understand to what extent medical credit cards and loans may hamper financial assistance and access to benefits, and any options for regulators to reduce such barriers. The agencies also seek to understand the extent to which health care providers, including tax-exempt hospitals, screen patients for public or private insurance eligibility, financial assistance eligibility, or other benefits before offering them medical credit cards or loans. The agencies additionally seek comment on how frequently patients discover billing errors after signing up for a medical payment product, the main sources of billing errors, and how paying medical bills via a medical payment product affects patients' ability to dispute those bills. The agencies seek comment on how to ensure that patients retain their rights to challenge inaccurate bills regardless of payment method.

The agencies also seek comment on incentives offered by financial companies to health care providers for their promotion of medical payment products, including revenue-sharing and other incentives. The agencies are also interested in any training or other support that medical payment product companies offer to providers. The agencies are interested in whether such incentives or support might implicate the Federal anti-kickback statute or other laws or regulations. The agencies also seek information regarding how plans and issuers' billing and reimbursement practices affect health care providers' decisions to offer and promote medical payment products.

The agencies seek additional information on the prices or versions of standard charges offered to patients who use these products, and whether these charges are adequately disclosed in accordance with hospital price transparency requirements and No Surprises Act good faith estimate requirements. The agencies seek information on whether medical payment product companies are operating outside of protections against credit reporting of medical collections items and against extraordinary collection actions by tax-exempt hospitals. Finally, the agencies seek to better understand how notice and consent requirements for post-stabilization and non-emergency health care items or services under the No Surprises Act intersect with providers' promotion of medical credit cards and loans to out-of-network patients.

In general, the agencies welcome any information that allows us to better understand the impact of medical payment products on patients' physical, mental, and financial health. The agencies also welcome suggestions of actions Federal agencies could take to address harms caused by medical payment products and related issues connected to medical billing and collections or medical debt more generally. The agencies welcome comment on these areas, including comments in response to any of the following specific questions: . . .

FRN: https://www.federalregister.gov/d/2023-14726 [10 pages]
July 7 CFPB press release: https://www.consumerfinance.gov/about-us/newsroom/inquiry-into-costly-credit-cards-and-loans-pushed-on-patients-for-health-care-costs/

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