The Attorney General of California yesterday sent a letter to a number of federal agencies, including the Consumer Financial Protection Bureau and the Department of Health & Human Services, calling for federal regulations on medical payment products, such as medical credit cards, saying the products “can leave users with crushing debt and long-term financial hardship, often in situations where they might have been eligible for payment reductions or charity care.” The AG is calling on the CFPB to use the Fair Debt Collection Practices Act, among other options, to hold medical credit card issuers accountable for making sure a consumer is able to repay and not eligible for other financial assistance programs.
A copy of the letter can be accessed by clicking here.
Among the other recommendations made in the letter are:
- Designating medical credit card debt as medical debt, not consumer debt, thus ensuring users receive statutory protections.
- Ensuring providers properly screen patients for financial aid and charity care before they are offered a medical payment product.
- Limiting enrollment in medical payment products in provider offices (when patients are often drowsy, in pain, or distressed).
- Providing patients with written notice of financial assistance and potential eligibility for charity care.
- Making reasonable efforts to notify patients whether insurance fully or partially covers their medical expenses.
- Reducing cost-sharing responsibilities to reduce patient need for medical payment products.
“The mounting cost of medical care in our nation is a crisis — one that disproportionately affects our most vulnerable communities,” said Attorney General Rob Bonta. “It’s no wonder that more and more patients are having to turn to products like medical credit cards to pay for their healthcare bills. While such products may appear to be a lifeline to paying care in the short-term, users risk being saddled with high interest rates or getting trapped into years of debt. I urge the federal government to act swiftly to ensure medical payment products can be used safely, and patients are protected from unnecessary financial harm.”
Bonta pointed to a number of laws enacted in California aimed at protecting consumers from the harms of these types of products.
Among other recommendations made by Bonta in the letter are:
- Empowering the CFPB to use its authority to prevent unfair, deceptive, or abusive acts and practices under the Consumer Financial Protection Act to require that healthcare providers screen patients for eligibility for financial assistance before enrolling them in any medical payment product
- Requiring providers of medical payment products undertake reasonable efforts to ensure that consumers are not charged for services that should be covered by insurance or provider financial assistance. “Reasonable efforts” could be defined to include receiving a certification from the provider that the patient in question was screened for and found ineligible for financial assistance.