CFPB, U.S. Department of Health and Human Services (HHS), and U.S. Department of Treasury (Treasury) Launch Inquiry into Costly Credit Cards and Loans Pushed on Patients for Healthcare Cost
The Consumer Financial Protection Bureau (CFPB), HHS, and Treasury have initiated an inquiry into high-cost specialty financial products, such as medical credit cards and installment loans, which are often promoted to patients as a means to pay for routine medical care. These products not only contribute to the rising costs of health care but also lead to significant medical debt. The three agencies are seeking public input to better understand the prevalence of these products, patients’ experiences with them, and the incentives for healthcare providers to offer these high-cost options. This inquiry aims to address the harm caused to patients and explore potential solutions.
Examining the Impact of Specialty Healthcare Cost
Medical payment products, which were initially intended for non-traditionally covered services like dental and cosmetic surgery, have expanded to cover a broader range of medical care, including emergency visits and primary and specialty care. Healthcare providers often introduce these products to patients, effectively outsourcing the billing and collections process to financial service companies. However, the CFPB’s research has revealed that providers may fail to inform patients about legally mandated financial assistance programs or interest-free repayment options before promoting these products. Consequently, patients may find themselves burdened with mounting deferred interest or facing creditor lawsuits.
Addressing Consumer Harms and Financial Challenges
The request for information from the agencies aims to gain a deeper understanding of the consumer harms and financial challenges associated with specialty medical payment products. By soliciting public input, the agencies seek to incorporate the consumer perspective in their efforts to address these issues. The CFPB, in particular, intends to take action regarding the credit origination, debt collection, and credit reporting practices of financial companies involved in these products. The agencies are specifically interested in gathering information on:
- The specialty medical payment product market: Data and comments on interest rates, fees, marketing practices, application processes, and approval criteria. The agencies also seek insights into the total outstanding consumer debt related to medical credit cards, installment loans, and other medical payment products.
- Patient experiences and downstream consequences: Understanding the risks associated with using medical payment products, as well as whether consumers fully comprehend these risks. Risks may include loss of negotiating power for medical bills, aggressive debt collection practices, lawsuits, and compromised credit reporting protections.
- Billing and financial assistance issues: Exploring how medical credit cards and loans contribute to existing problems in health care billing and collections. For example, uninsured or out-of-network patients often face higher charges compared to in-network insured patients for the same services. Medical payment products may enable providers to continue charging high prices to uninsured or self-pay patients who are unable to afford them.
- Health care provider incentives: Investigating the incentives offered to health care providers to promote medical payment products and how these incentives influence the providers’ endorsement of such products to patients. Some providers may receive a share of the revenue generated by these products, while others may benefit from lower processing or management fees for enrolling a large number of patients.
Seeking Public Input: Inquiring into the Impact of Specialty Medical Payment Products
The CFPB invites comments and data from the public and all interested stakeholders within 60 days of the publication of the request for information in the Federal Register. This engagement with the public will play a vital role in shaping future actions and policies to mitigate the harms caused by specialty medical payment products. By safeguarding consumers against predatory medical debt and collection practices, the agencies aim to create a more transparent and fair healthcare financing system that prioritizes the well-being of patients.