The Consumer Financial Protection Bureau and the Centers for Medicare & Medicaid Services yesterday issued a joint statement reminding and warning companies in the credit and collection industry that millions of low-income Medicare recipients, known as Qualified Medicare Beneficiaries (QMBs), are protected by federal law from being charged for Medicare cost-sharing, such as co-pays and deductibles.
What’s happening: The CFPB and CMS reiterated the protections for QMBs and warning healthcare providers, Medicare Advantage plans, and debt collectors about the legal consequences of improper billing and collection practices. The statement allowed CMS to release new guidance about how healthcare providers should verify QMB status while the CFPB reminded everyone about how it will apply the Fair Debt Collection Practices Act and Fair Credit Reporting Act if improper debt collection of QMBs occurs.
- QMB protections: QMBs, who qualify for Medicaid to cover their Medicare premiums and cost-sharing, cannot be charged for Medicare Part A and B deductibles, coinsurance, or copays. Federal law mandates that healthcare providers must not bill these individuals for cost-sharing amounts, but improper billing remains a widespread issue.
- The impact: Approximately 9% of QMBs reported issues with improper billing in 2023, a higher rate than other Medicare beneficiaries. Improper charges often lead to debt collection actions and negative credit reporting, affecting access to housing, utilities, and other critical services for beneficiaries.
What they’re saying: CFPB Director Rohit Chopra emphasized the dire financial impact of unlawful medical billing, noting that medical bills contribute significantly to bankruptcy and financial collapse for families. CMS Administrator Chiquita Brooks-LaSure echoed this sentiment, highlighting the importance of ensuring that people do not fear medical bills they shouldn’t have to pay.
- Debt collectors beware: The joint statement highlights that debt collectors who attempt to collect on improper QMB bills may violate the FDCPA and the FCRA. Debt collectors could face strict liability for attempting to collect debts that aren’t owed or for furnishing incorrect information to credit agencies.
- CMS guidance: CMS has released new resources reminding healthcare providers to identify QMB status correctly and refund any improper charges collected from QMBs. Providers who violate these rules may face sanctions.
