Patient groups push for government to take more steps to pay medical debts

Photo: Kameleon007/Getty Images

Patient and consumer advocacy organizations, including the Center for American Progress and the Health Legal Council, have sent letters to the IRS and the Consumer Protection Bureau urging the Biden administration to do more to protect Americans from medical bills and debt collectors.

The groups are advocating that the federal government strengthen financial assistance policies, limit hospital fees, and protect people from certain billing and debt collection practices in an effort to keep medically necessary care debt from appearing on consumer credit reports.

WHAT INFLUENCES

In their letter to the IRS, the groups said that about a third of all adults in the US have medical debt.

“People with medical debt have disproportionately low incomes, and 80% of medical debt is in households with negative net worth,” they wrote. “As a result of discriminatory barriers to economic security, Black and Hispanic households are more likely than white households to have medical debt, so action to reduce it is a step towards equity.”

The groups urged the IRS to strengthen and enforce existing rules, specifically the provisions of Section 1.501(r) of the Affordable Care Act, which they believe “may be improved to limit the accumulation of medical debt, make billing and collection more equitable, and hold non-profit hospitals accountable for practices that are contrary to their charitable status and harmful to their patients.”

Section 1.501(r) gives hospitals ample opportunity to develop and implement the Financial Assistance Policy (FAP) mandated by the ACA, they said.

In terms of specific action, the letter suggested that the IRS specify minimum financial eligibility criteria, such as the percentage of the federal poverty level below which a family could qualify for free care; prohibit certain non-financial eligibility restrictions such as residency requirements, legal presence requirements, and other barriers to receiving assistance; require hospitals to help patients with the FAP application; and require hospitals to publish FAP application data in their health needs assessments to provide transparency about hospital practices and the debt their patients have.

To protect people from certain billing and debt collection practices, the groups have said that the IRS should reduce emergency debt collection actions (ECA) by outright prohibiting certain activities such as foreclosure, forfeiture of bank accounts, and sale of debt; prohibit the delay or denial of medically necessary medical care in the future due to non-payment.

In a letter to the Consumer Financial Protection Bureau, the groups said the CFPB should develop rules to strengthen the protections of the Fair Credit Reporting Act, take action to eliminate deferred interest on medical credit cards, and actively pursue “unscrupulous, misleading, and abusive practices.” “

“CFPB should work with state attorneys general and other consumer financial regulators to bring lawsuits against suppliers that violate state laws, such as its recent lawsuit against Bank of America for wrongful arrests,” the groups wrote.

BIG TREND

Unpaid medical bills are one of the largest sources of debt for Americans, reaching $140 billion in 2020, according to a 2021 JAMA analysis.

In June 2020, an estimated 17.8% of people had sickness debt, with 13% accumulating debt during the previous year. The average amount was $429, with $311 accrued during the previous year.

Twitter: @JELagasse
Write to the writer: [email protected]