Companies that collect medical debt were put on notice yesterday by the Consumer Financial Protection Bureau to make sure that the debts they are trying to collect are not prohibited under the recently enacted No Surprises Act. Collectors that attempt to collect debts that exceed the amount permitted under the No Surprises Act could be found in violation of the Fair Debt Collection Practices Act, while those that furnish inaccurate information about unpaid medical debts in which the amount owed exceeds the amount permitted under the No Surprises Act could be found in violation of the Fair Credit Reporting Act.
“Too many Americans have been shocked by surprise medical bills and forced to pay up through credit report coercion,” said CFPB Director Rohit Chopra, in a statement. “Our action today should serve as a reminder not to collect on or furnish credit reporting information about invalid medical debt.”
The CFPB said it will be investigating claims and taking action against companies that try to collect or furnish information about debts stemming from charges that exceed the amounts permitted under the No Surprises Act.
The No Surprises Act, which went into effect on January 1, bans hospitals and healthcare providers from billing individuals who receive medical care outside of their insurance networks. Under the law, patients are only responsible for the in-network cost-sharing responsibilities, such as deductibles and co-pays, while insurance companies and healthcare providers would negotiate the remaining unpaid portions of a patient’s bill.
Consumers, faced with a medical bill, are “generally ill suited to the task of identifying billing errors,” the CFPB noted in its bulletin, and “may have difficulty” determining what portion of a bill was paid by insurance and whether that amount was already paid.
Noting that some debts may be placed with third-party agencies for collections, the bulletin warns that collectors may violate the FDCPA’s prohibition against misrepresenting the amount owed if it “represents that a consumer owes a debt arising from out-of-network charges for emergency services … if those charges exceed the amount permitted by the No Surprises Act.”
The CFPB also reminded companies that furnish information about medical debts to credit reporting agencies that the information that is furnished must be accurate. “… a debt collector who furnishes information indicating that a consumer owes a debt arising from out-of-network charges for emergency services (or a CRA that includes such information in a consumer report) may violate the FCRA and Regulation V if those charges exceed the amount permitted by the No Surprises Act or if the furnisher (or CRA) fails to meet its dispute obligations,” the CFPB noted.