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Medical debt collection landscape to change

Medical debt collection landscape to change

The Biden Administration recently announced an initiative to evaluate how providers’ billing practices impact access and affordability of care and the accrual of medical debt. The Department of Health and Human Services (HHS) will request data from more than 2,000 providers on medical bill collection practices, lawsuits against patients, financial assistance, financial product offerings, and third party contracting or debt buying practices. HHS will, for the first time, weigh this information in their grantmaking decisions, publish topline data and policy recommendations for the public, and share potential violations with the relevant enforcement agencies of jurisdiction. Practices should be aware of HHS’s anticipated inquiry, but there is not sufficient information at this time to determine the scope of this inquiry, including whether the term “providers” encompasses physicians.

Separately, the Biden Administration announced that the Consumer Financial Protection Bureau (CFPB) will investigate credit reporting companies and debt collectors that violate patients’ and families’ rights and will hold violators accountable. The CFPB has already issued a bulletin to prevent unlawful medical debt collection and reporting. The CFPB will target coercive credit reporting and determine whether unpaid medical billing data should ever be included in credit reports.

The Biden Administration’s plan comes at the same time as the three largest credit reporting agencies – Equifax, Experian, and TransUnion – announced significant changes to medical collection debt reporting to support consumers faced with unexpected medical bills. These joint measures will remove nearly 70% of medical collection debt tradelines from consumer credit reports. Specifically, effective July 1, 2022, paid medical collection debt will no longer be included on consumer credit reports. In addition, the time period before unpaid medical collection debt would appear on a consumer’s report will be increased from six months to one year, giving consumers more time to work with insurance and/or health care providers to address their debt before it is reported on their credit file. Also, in the first half of 2023, Equifax, Experian, and TransUnion will no longer include medical collection debt under $500 on credit reports.

These developments signal that medical debt collection is going to become even more difficult for physician practices. Implementing successful in-house collection programs and collecting from all available payment sources should be a priority for practices and will minimize the number of accounts aging to bad debt status. To improve your in-house collections, we recommend the following steps:

  1. Improve collection of patient information and payments up front.
    Preregister patients by collecting demographic and insurance information over the phone or online when they make an appointment. Verify insurance information before the appointment and collect copays, deductibles and outstanding balances when the patient checks in.
  2. Train your front desk staff on how to provide excellent customer service – while still asking for payment.
    The College’s 15-minute educational module “Steps for Successful Front Desk Training” is part of our free Allergy Office Essentials package and provides your staff with helpful tips on maintaining appropriate body language and verbal language skills, collecting payment, and more.
  3. Consider implementing a credit card on file program.
    A credit card on file policy involves safely and securely storing your patients’ credit card information electronically. The College’s 15-minute educational module, “Credit Card on File” will explain how to implement this program, and includes training for staff, tactics for communicating the new policy to patients, and more. You can find this educational module in the Allergy Office Essentials package.

For more tips on how to improve practice collections, view the College’s Collections Toolkit.

The Advocacy Council: ADVOCATING FOR ALLERGISTS AND THEIR PATIENTS.

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